U.S. and Canadian stocks were upbeat on Friday as investors digested comments from Federal Reserve Chair Jerome Powell that the U.S. central bank may need to raise interest rates further to ensure inflation is contained.
Powell also acknowledged that price pressures have eased in his anticipated morning speech at the Economic Policy Symposium in Jackson Hole, Wyoming.
The big U.S. stocks, which started the day with solid gains, alternated between extending and paring those gains for much of the session.
Powell is demonstrating that he is happy with how the monetary policy has progressed and how inflation has been reduced. But he is still holding on tight to this notion that they are watching it carefully and they still have work to do, said Michael Arone, the investment strategist at State Street Global Advisors in Boston.
Following Powell's comments Friday, expectations of a rate hike in November rose from a day earlier, according to CME Group's FedWatch tool. Most traders still await the Fed's decision to stop hiking in September.
The S&P/TSX composite index at the Toronto Stock Exchange ended up 59.92 points, or 0.3%, at 18,835.75. The S&P 500 gained 0.0 percent for the week. It's still losing 3.8% since the start of August.
I think there's a catch-up trade to be had in energy, said Mike Archibald, vice president and portfolio manager at AGF Investments.
In Toronto, industrials rose 0.7%, but heavily-weighted financials remained down 0.4% and the materials sector, which includes precious and base metals miners and fertilizer companies, lost 0.3%.
The S&P 500 sector rose, with consumer discretionary, technology and energy among the top gainers.
The Dow Jones Industrial Average surpassed 34,346.9, the S&P 500 surpassed 29.4 points, or 0.67%, to 4,405.71 and the Nasdaq Composite added 126.67 points, or 0.94%, to 13,590.65.
For the week, the S&P 500 and the Nasdaq were both higher, with the Nasdaq up about 2.3% and ending a three-week streak of losses. The market rose in the run up to Nvidia's second-quarter results Wednesday.
The company, which makes chips for artificial intelligence tasks, gave another upbeat forecast in its report.
In the retail industry, Gap shares rose 7.2 percent after the company beat second-quarter earnings forecasts, while Nordstrom fell 7.7 percent after the department store chain left its forecasts unchanged.
Shares of Hostess Brands rose 21.7% after Reuters reported, citing people familiar with the matter, that the maker of Twinkies snacks is exploring a sale.
Marvell Technology's shares fell 6 percent after the chipmaker reported a drop in revenue in the second quarter.
The Hawaiian Electric Industries, which has been under scrutiny over its possible role in the Hawaii wildfires, fell 18% Friday after the state of Maui filed a lawsuit against the power company.
The volume on US stock exchanges rose to 9.15bn shares, compared to the average of 10.82bn shares for the same period in the past 20 trading days. Advancers on the NYSE outnumbered declining ones by a 1.51-to-1 ratio, while Nasdaq favored advancers by a 1.24-to-1 ratio. The S&P 500 was up 6 new 52-week highs and 7 new lows, while the Nasdaq Composite saw 23 new highs and 202 new lows.