U.S. stocks rose on Friday with the S&P 500 building on its rally to records, as investors bet that higher inflation will be temporary as the economy continues to recover from the pandemic.

The broad equity benchmark climbed 0.3% to hit another closing record high of 4,280.70. Financials were the best-performing S&P 500 sector with a 1.3% gain. The S&P 500 rallied 2.7% for the week, notching its biggest weekly gain since early February. 

Friday’s rally came after a key inflation indicator that the Federal Reserve uses to set policy rose 3.4% in May, the fastest increase since the early 1990s, the Commerce Department reported Friday. The reading matched the expectation from economists polled by Dow Jones. The core index rose 0.5% for the month, which actually was below the 0.6% estimate.

The core personal consumption expenditures price index increase reflects the rapid pace of economic expansion and resulting price pressures, and amplified how far the nation has come since the pandemic-induced shutdown of 2020.

Futures contracts tied to the major U.S. stock indexes rose early Monday morning after the S&P 500 notched its best week since February, as well as a new record, on Friday.

The Nasdaq Composite erased earlier gains and closed 0.1% lower at 14,360.39 amid a rise in bond yields. 

Stocks posted their best week in months on Friday as investors grew more relaxed about inflation, seeing the current price acceleration in the U.S. not as a sustained economic threat, but as a temporary uptick.

The next major piece of economic data is the June jobs report, which the Labor Department is scheduled to publish on Friday.

Economists are expecting that nonfarm payrolls increased by 683,000 in June. While such a robust reading would top the 559,000 in May, it would still be below the 1 million some had hoped a recovering U.S. economy could post as it emerged from the Covid-19 crisis.

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Plan A : Remain buy as long as oil price trades resiliently above 72.8. Targets are 74.3 and 75.8.

Plan B : Consider short only if oil price fails to breach above 74.3. Targets are 73.9 and 72.8.

Gold

Gold edged higher on Friday after stagnant U.S. consumer spending tempered bets for early monetary policy tightening by the Federal Reserve, setting bullion on track for its first weekly gain in four.