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All three major U.S. indexes and the TSX ended the week with gains after a slew of earnings from big technology companies, economic data and central bank announcements boosted investor confidence in a soft landing for the U.S. economy.

U.S. annual inflation slowed considerably in June, likely pushing the Federal Reserve closer to ending its fastest interest rate hiking cycle since the 1980s, data showed on Friday.

In the 12 months through June, the PCE price index advanced 3.0%. That was the smallest annual gain since March 2021 and followed a 3.8% rise in May.

“You put all that together and you end up with this idea that this Goldilocks economy might continue for a little while, with inflation clearly coming down,” said Scott Ladner, Chief Investment Officer at Horizon Investments.

The Dow Jones Industrial Average rose 176.37 points, or 0.5%, to 35,459.09, the S&P 500 gained 44.76 points, or 0.99%, to 4,582.17 and the Nasdaq Composite added 266.55 points, or 1.9%, to 14,316.66.

“People are more sanguine about the possibility of inflation being under control and the economy avoiding a recession,” said Win Murray, director of research at asset manager Diamond Hill.

For the week, the Nasdaq climbed 2.02%, while the S&P rose 1.01%, and the Dow gained 0.66%. The gains gave the S&P 500 its highest close since April 4, 2022.

On Wednesday, Federal Reserve Chair Jerome Powell said the Fed was not forecasting a recession and did not rule out another rate hike, saying it would follow future economic data.

To complete a week of encouraging signs, more than half of the firms listed on the S&P 500 have reported second quarter earnings as of Friday, out of which 78.7% have surpassed analyst expectations, according to Refinitiv data.

Barclays said investors flocked to equities this week, with inflows of $10 billion to U.S.-listed stocks, according to a note to clients.

Citibank late Friday increased its year-end 2023 and mid 2024 S&P 500 targets to 4600 and 5000, respectively, partly in response to strong earnings. “The near-term hurdles we envisioned headed into Q3 are now behind. The new targets reflect increased probability of a soft landing,” the bank said in a note.

Canada’s main stock index clawed back nearly all of its weekly decline on Friday, helped by gains for resource and technology shares.

The S&P/TSX composite index ended up 133.9 points, or 0.7%, at 20,519.37. For the week, it was down 0.1%.

Data Friday showed Canada’s economy grew 0.3% in May but likely contracted in June.

The Toronto market’s energy sector rallied 2.5% as oil settled 0.6% higher at $80.58 a barrel, while the materials group, which includes precious and base metals miners and fertilizer companies, added 1.2%. It was helped by higher gold and copper prices.

Technology was also a standout, advancing 2%. Shares of electronics company Celestica Inc jumped 15.2%, its second day of sharp gains.

In contrast, shares of TC Energy Corp fell 4.3% after the Keystone pipeline operator said it would spin off its liquids business to focus on transporting natural gas.

Most of the 11 major S&P 500 sectors posted gains, led by communications services, which gained 2.3% as big tech companies kept an upward trend after announcing earnings earlier this week.

On the earnings front, Intel’s results and forecast pointed to an improving PC market, sending the chipmaker’s shares up 6.60%.

Peers Nvidia and Marvell Technology also gained 1.85% and 1.60% respectively.

On Thursday, the blue-chip Dow snapped its longest winning streak since 1987 as U.S. Treasury yields pressured stocks after news that the Bank of Japan will allow long-term interest rates to rise.

The Bank of Japan made its yield curve control policy more flexible and loosened its defense of a long-term interest rate cap, in moves seen by investors as a prelude to an eventual shift away from massive monetary stimulus.

The yield on the U.S. 10-year note slipped from 4% hit in the previous session, lifting megacap growth and technology stocks sharply higher.

Procter & Gamble climbed 2.83% after the consumer behemoth beat analysts’ estimates for quarterly sales.

Ford Motor shed 3.42% after Chief Executive Jim Farley outlined a change in the automaker’s product strategy, slowing the ramp-up of money-losing electric vehicles.

Enphase Energy fell 7.48% after the solar inverter maker’s third-quarter revenue forecast missed expectations, while Juniper Networks tumbled 6.94% as the network operator forecast third-quarter revenue below market estimates.

Exxon Mobil fell 1.19% after the oil giant posted a 56% slump in quarterly profit, while peer Chevron shed 0.50% after forecasting annual production near the low end of its previously estimated range.

Reata Pharmaceuticals surged 54.02% after Biogen agreed to buy the rare disease drugmaker for nearly $6.5 billion.

Advancing issues outnumbered declining ones on the NYSE by a 2.64-to-1 ratio; on Nasdaq, a 2.81-to-1 ratio favored advancers.

The S&P 500 posted 27 new 52-week highs and two new lows; the Nasdaq Composite recorded 83 new highs and 84 new lows.

Reuters, Globe staff

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