Wall Street Today | Market Reflects Positive Inflation Outlook With Third Straight Week of Stock Gains

U.S. stocks crossed the line in the green Friday as the S&P scored a third straight week in the green, as investors celebrated slowing inflation and got ready to kickstart Santa season with Thanksgiving and Black Friday.

Crude oil Rose 4% Friday after a dramatic drop of 7% throughout the week, softening to about -3%. Due to a price-setting meeting next week, OPEC blamed speculators and trading bots while defending demand.

CPI numbers on Tuesday showed inflation slowed in October, and the market roared. President Xi and Biden met for the first time in a year in San Francisco at the APEC summit, shaking hands and talking positively, but Biden's later comments drove pessimism into U.S. traded Chinese companies. PPI data on Wednesday showed the largest drop in producer prices in three years.

"You're not seeing broad-based selling pressure," Keith Lerner, co-chief investment officer at Truist Advisory Services, told MarketWatch. While the S&P 500's technology-related stocks were "taking a breather" after a strong rally this month,  he said there's some "risk-on" trading in the market when looking at cyclical-oriented areas such as small-cap stocks and the S&P 500's energy, financials, and industrials sectors.

The Federal Reserve should wait and see how the economy develops given the high uncertainty surrounding the outlook for the U.S. economy, San Francisco Fed President Mary Daly said Friday.

"When we know where we're going and it's important to get there, moving aggressively makes sense," Daily said in a speech at a banking conference in Frankfurt. But she noted that sometimes a "different type of boldness is required: the boldness to wait."

Daly added: "When uncertainty is high and the risks to our objectives more balanced, we need to practice gradualism. That means the Fed is saying, We don't know yet."

Traders in derivative markets now expect the Fed to remain on hold until next May and that the next move will be to cut rates. The central bank last raised its benchmark rate to between 5.25%-5.5% in July.

Crude oil futures rebounded some 4% Friday afternoon after Thursday's decline pushed the commodity into bear-market territory. Brent crude rose 4.2% to $80.65 a barrel at last check, while West Texas Intermediate for December delivery gained 3.9% to $75.76.

Prices partly recovered thanks to a weaker U.S. dollar, with the ICE U.S. Dollar Index off 0.3% at 103.91 shortly before 1 p.m. ET. Still, analysts noted that momentum would likely continue to carry prices lower amid fears of slowing global demand.

WTI fell into bear-market territory on Thursday after it dropped to 22.2% below oil's 52-week high of $93.68 set on Sept. 27. That put the commodity into bear-market territory, which generally refers to a 20% drop or more.