Dow rises greater than 200 factors amid tame inflation information, financial institution shares lead

US stocks rose on Friday, led by bank stocks and economic reopening games as investors cheered data showing subdued inflation.

The Dow Jones Industrial Average gained 230 points. The S&P 500 rose 0.7%, led by energy and materials. The Nasdaq Composite rose 0.5%.

Financial stocks rose after the Federal Reserve announced that banks could resume buybacks and raise dividends from late June. The central bank originally announced that it would lift restrictions on the pandemic in the first quarter, but even the belated move gives investors more clarity.

JPMorgan’s shares were up 1.5% while Bank of America was up 2%. Goldman Sachs was up 1%.

Classic re-opening games build on the dynamics of the previous session. American Airlines was up 1% while Royal Caribbean, Carnival and Norwegian Cruise Line were up more than 1%.

Fears of rising inflation eased after the data showed tamed price pressures. The core consumer spending index, which excludes volatile food and energy prices, rose 0.1% month-on-month, in line with the expectations of economists polled by Dow Jones. Year after year, the measured value rose by 1.4% and was thus slightly below an estimate of 1.5%.

“PCE deflator data, which is softer than expected, supports the idea that government bond yields are likely to consolidate in the near term,” said Edward Moya, senior market analyst at Oanda. “The lower the inflation base, the easier it is for markets to convince themselves that the impending rise in price pressures will be temporary.”

The 10-year US Treasury yield fell from its peak after the inflation data, and most recently rose 3 basis points to 1.65%. The rate jumped 6 basis points earlier.

Meanwhile, consumer sentiment in the US continued to rise during the introduction of the vaccine. A University of Michigan poll released Friday found the consumer sentiment index finalized at 84.9 in March, up from 76.8 in February. Economists polled by Dow Jones expected a value of 83.7.

The key averages are on track to make small wins for the week after consecutive wins. The S&P 500 and Dow are both up about 0.7% this week, while the Nasdaq is up 0.4% from the week. The rally to record highs has slowed in recent weeks amid rising interest rates and valuation concerns.

“The market has been feeling rather choppy lately and this could become more of the norm as we enter the second year of recovery,” said Larry Adam, chief investment officer at Raymond James. “These periods, like most, are not moving in straight lines as there will be drawdowns along the way. This is not for concern, but investors should expect and take advantage of some weakness.”

President Joe Biden announced a new goal Thursday of distributing 200 million Covid vaccine shots within his first 100 days in office. As of Friday, there have been 100 million coronavirus vaccinations since Biden was inaugurated.