Global stocks closed out a strong week with most bourses gaining Friday as markets took a benign view of recent inflation data and greeted progress on a US infrastructure package.
Markets had jumped Thursday after the Bank of England (BoE) maintained its ultra-low interest rates, echoing the views of the US Federal Reserve and the European Central Bank that inflationary spikes are only temporary.
Traders have for months worried that the blistering global recovery will fan price increases and force rate hikes -- but central bankers have sought to downplay inflation risks.
"That BoE meeting did alleviate fears of a hawkish swing across the central banks, but ultimately whether the BoE or the Fed are right will come down to the trajectory of inflation over the coming months," IG analyst Joshua Mahony said.
The Dow suffered its worst week since October last week due in part to a shift in messaging from the Federal Reserve.
But equities recovered this week, as investors greeted statements from Fed Chair Jerome Powell and other top central bankers that signaled no plans for an abrupt pivot in their easy money policies.
- Inflation disagreement -
Also this week, a parade of Fed speakers showed "most" are sanguine about inflation, "but some are getting nervous," said Chris Low of FHN Financial.
"At the moment, there's no way to know for certain which group is closer to the truth," Low said.
On Friday, investors shrugged off Commerce Department data that showed the personal consumption expenditures price index spiked 3.9 percent in May if compared to the same month in 2020.
Markets were also driven by anticipation of another injection of federal spending into the US economy, after President Joe Biden on Thursday said a deal had been reached with a bipartisan group of lawmakers to spend nearly $1 trillion on infrastructure.
The broad-based S&P 500 ended at 4,280.70, up 0.3 percent and a second straight record. The index added 2.7 percent for the week.
Earlier, London stocks showed a gain of 0.4 percent as trading ended for the week, while Frankfurt was slightly stronger and Paris was slightly softer.
- Improving demand -
Markets in Asia had rallied following the strong US session on Thursday.
The oil market also remained upbeat, reaching highs last seen in 2018 as traders grow increasingly confident that strong demand will improve further as the recovery progresses.
Among individual companies, Dow member Nike surged more than 15 percent after reporting blowout earnings and projecting solid sales growth through 2025, as it touts its ramp-up of direct selling of sports merchandise to consumers.
FedEx dropped 3.6 percent as it reported better than expected profits, but warned of higher labor costs.
- Key figures at 2045 GMT -
New York - Dow: UP 0.7 percent at 34,433.84 (close)
New York - S&P 500: UP 0.3 percent at 4,280.70 (close)
New York - Nasdaq: DOWN 0.1 percent at 14,360.39 (close)
London - FTSE 100: UP 0.4 percent at 7,136.07 (close)
Frankfurt - DAX 30: UP 0.1 percent at 15,607.99 (close)
Paris - CAC 40: DOWN 0.1 percent at 6,622.87 (close)
EURO STOXX 50: FLAT at 4,120.66 (close)
Tokyo - Nikkei 225: UP 0.7 percent at 29,066.18 (close)
Hong Kong - Hang Seng Index: UP 1.4 percent at 29,288.22 (close)
Shanghai - Composite: UP 1.2 percent at 3,607.56 (close)
Euro/dollar: UP at $1.1938 from $1.1932 at 2100 GMT
Pound/dollar: DOWN at $1.3885 from $1.3922
Euro/pound: UP at 85.99 pence from 85.70 pence
Dollar/yen: DOWN at 110.79 yen from 110.87 yen
Brent North Sea crude: UP 0.8 percent at $76.18 per barrel
West Texas Intermediate: UP 1.0 percent at $74.05 per barrel