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U.S. stocks gained Friday, shaking off some losses from earlier this week after concerns over persistent inflation and the resilience of the U.S. economy stirred up further volatility in recent sessions.

The S&P 500 rose by more than 1.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} intraday on Friday while the Nasdaq jumped by nearly 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. The Dow added more than 350 points. The sharp move higher came after Federal Reserve Chair Jerome Powell reaffirmed in an interview with Marketplace public radio on Thursday that two more 50 basis point rate hikes were on the table for the next two Fed meetings, and that officials were not “actively considering” a more aggressive 75 basis point hike. His comments echoed what other Fed officials also said this week.

Just a day earlier, the S&P 500 had closed within striking distance of a bear market, typically defined as a close of at least 20{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from a recent record high. The index has declined by just over 18{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} from its Jan. 3 record high through Thursday’s close, and it paced toward a weekly drop of 4.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} if levels hold through the end of Friday’s session.

The Dow Jones Industrial Average and Nasdaq Composite each also headed for weekly losses of 3.6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} and 6.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}, respectively, based on Thursday’s closing prices. Treasury yields have spiked and then pared gains back this week, with the benchmark 10-year Treasury yield hovering around 2.9{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} Friday morning. Bitcoin prices recovered to trade above $30,000 after setting the lowest level since Dec. 2020, as a cratering in prices of Luna further reverberated across the broader cryptocurrency market.

The market gyrations this week coincided with two major inflation reports that came in hotter-than-expected. Thursday’s Producer Price Index showed an 11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} year-over-year rise in wholesale prices last month, with this rate moderating only slightly from March’s all-time high rate of 11.5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. And the Consumer Price Index released earlier this week showed a still-elevated 8.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} annual increase in prices paid by consumers last month.

“Inflation has certainly become not only topical, but a real issue for the broader market, as the Fed has also increased its outlook for the number of [interest rate] hikes needed,” Sonali Pier, managing director and portfolio manager at Pimco, told Yahoo Finance Live on Thursday. “In terms of the effect of inflation, it’s really at this point, we’re going to see if the Fed raising rates, unwinding some of the balance sheet, can take off some of that inflation froth. Because it’s quite high, and it’s starting to impact companies — from their ability to push through from a pricing power perspective, as well as consumers, whether that’s at the gas pump or as a result of food increases and the like.”

Other strategists agreed that the Fed’s response to inflation — and how well the economy holds up as the Fed tightens financial conditions to address inflation — will be the key factor to watch going forward for the markets.

“We’re in an environment right now where inflation is high. The labor market is very tight. The Fed wants to bring inflation down. They want to sort of cool the overheating in the labor market, which means their bias is to tighten financial conditions and try and slow growth,” Jason Draho, UBS Head of Asset Allocation, said on Thursday. “In that environment, it’s not great for any sort of financial assets.”

“[Once] we get some sort of real break on inflation that people become much more comfortable that it’s moderating, and moderating [to] a sustainable level that the Fed could be more comfortable, and they don’t have to hike more aggressively … I think that’s the key catalyst,” Draho said. “Unfortunately, that might take a few more months before the data starts to clearly show inflation is definitely below its peak, and the Fed could achieve its target two years out.”

“So I think for the time being, it’s definitely a choppy market,” he added.

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10:15 a.m. ET: Consumer sentiment drops to lowest level since 2011: University of Michigan

Consumer sentiment fell to a more than decade low in early May, according to the University of Michigan, as concerns around inflation persisted.

The University of Michigan’s closely watched Surveys of Consumers index dropped to 59.1 in the preliminary May report, declining sharply from April’s reading of 65.2. The latest reading marked the lowest since 2011.

The sentiment declines “were broad based — for current economic conditions as well as consumer expectations, and visible across income, age, education, geography, and political affiliation—continuing the general downward trend in sentiment over the past year,” Joanne Hsu, director of the Surveys of Consumers, said in a press statement. “Consumers’ assessment of their current financial situation relative to a year ago is at its lowest reading since 2013, with 36{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of consumers attributing their negative assessment to inflation.”

Consumers’ inflation expectations remained elevated in May, with the survey showing one-year inflation expectations were unchanged at 5.4{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}. However, some strategists suggested the drop in risk assets over the past several weeks played an even larger role in the drop in the headline index.

“I would argue that the drop was largely a function of the plunge in stock prices. We know U. Mich is more sensitive to markets,” Neil Dutta, head of economics at Renaissance Macro Research, wrote in an email Friday morning. “Inflation is an issue sure but the inflation expectations series were unchanged.”

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9:33 a.m. ET: Stocks open higher

Here were the main moves in markets as of 9:33 a.m. ET:

S&P 500 (^GSPC): +43.33 (+1.10{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,973.41
Dow (^DJI): +241.55 (+0.76{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 31,971.85
Nasdaq (^IXIC): +189.64 (+1.67{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,560.61
Crude (CL=F): +$3.05 (+2.87{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $109.18 a barrel
Gold (GC=F): -$24.60 (-1.35{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,800.00 per ounce
10-year Treasury (^TNX): +9.8 bps to yield 2.9150{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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7:54 a.m. ET: Tesla shares jump in early trading after Musk says Twitter deal on pause

Shares of Tesla (TSLA) jumped by more than 6{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} ahead of the opening bell Friday morning after CEO Elon Musk said his $44 billion plan to purchase Twitter (TWTR) was temporarily paused, pending more details over how much of Twitter’s use base comprises bot accounts.

“Twitter deal temporarily on hold pending details supporting calculation that spam/fake accounts do indeed represent less than 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of users,” Musk said in a Twitter post early Friday. He linked to a Reuters story suggesting Twitter filings showed fake or spam accounts made up fewer than 5{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} of the company’s monetizable daily active users.

In announcing his deal to buy Twitter over the past month, Musk has suggested targeting bot accounts and authenticating users was one of his priorities for the company post-deal.

Twitter shares sank 11{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} in early trading to hover around $40 apiece.

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7:45 a.m. ET Friday: Stock futures jump after Powell reaffirms 75 basis point rate hikes not currently under discussion

Here’s where markets were trading ahead of the opening bell Friday morning:

S&P 500 futures (ES=F): +46 points (+1.17{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,973.25
Dow futures (YM=F): +262.00 points (+0.83{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 31,914.00
Nasdaq futures (NQ=F): +206.75 points (+1.73{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 12,154.00
Crude (CL=F): +$1.79 (+1.69{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $107.92 a barrel
Gold (GC=F): -$7.90 (-0.43{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,816.70 per ounce
10-year Treasury (^TNX): +9.8 bps to yield 2.915{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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6:10 p.m. ET Thursday: Stocks open lower

Here’s where markets were trading Thursday evening:

S&P 500 futures (ES=F): -10 points (-0.25{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 3,917.25
Dow futures (YM=F): -73 points (-0.23{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 31,579.00
Nasdaq futures (NQ=F): -41 points (-0.34{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 11,906.25

NEW YORK, NEW YORK - MAY 12: Traders work on the floor of the New York Stock Exchange (NYSE) on May 12, 2022 in New York City. The Dow Jones Industrial Average fell in morning trading as investors continue to worry about inflation and other global issues. (Photo by Spencer Platt/Getty Images) — NEW YORK, NEW YORK – MAY 12: Traders work on the floor of the New York Stock Exchange (NYSE) on May 12, 2022 in New York City. The Dow Jones Industrial Average fell in morning trading as investors continue to worry about inflation and other global issues. (Photo by Spencer Platt/Getty Images)

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter.

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U.S. stock futures fell Friday morning to give back some gains after a three-day winning streak. However, the major equity indexes still headed for weekly advances as traders took favorably the Federal Reserve’s measured first move on raising interest rates.

Contracts on the S&P 500 declined. The index was on track to post its first weekly gain in three weeks, and its biggest since November 2020, based on closing levels from Thursday. U.S. crude oil prices rose to hold above $104 per barrel, while the 10-year Treasury yield declined to about 2.14{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

Meanwhile, shares of GameStop (GME) — the original darling of last year’s Reddit-fueled investing frenzy — sank after the retailer delivered a wider-than-expected fourth-quarter loss. Other “meme stocks” including AMC Entertainment (AMC) and BlackBerry (BB) also declined in sympathy.

FedEx’s (FDX) stock also dropped after the shipping giant posted quarterly earnings results Thursday afternoon. These reflected lower-than-expected profits, as rising labor and shipping costs more than offset FedEx’s price increases to customers.

For U.S. equity investors broadly, news this week that the Fed opted for a 25 basis point rate hike and charted out a route toward six additional rate hikes later this year helped provide clarity on the future monetary policy path and removed an overhang of uncertainty. The size of the interest rate hike was taken as a carefully considered first move, beginning the process of addressing inflation while avoiding delivering a major shock to markets already weighing Russia’s war in Ukraine.

“They took what I would consider the safe route, which was to do 25 basis points,” Sonal Desai, Franklin Templeton Fixed Income chief investment officer, told Yahoo Finance Live on Thursday. “Absent what we are seeing on the geopolitical stage right now, they probably would have gone for 50. So I definitely would not rule out a faster, more front-loaded pace of rate hikes going forward.”

And later, Fed officials may also upwardly revise its projections for where interest rates will end this year, in the event that inflation does not moderate quickly, Desai added. Based on the Fed’s projections from Wednesday, short-term interest rates would likely end the year around 1.75{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}.

“I could see them going up to 2{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} this year — we could expect, by the end of next year, looking at something closer to 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996},” she added. “So I’m looking at what the Fed has done. I think it was what as needed because it may come across as hawkish, but the Fed is enormously behind the curve at this point.”

Technology stocks in particular got a boost following the Fed’s decision, with some of the most badly beaten down growth names recovering some year-to-date losses. While some strategists suggested the bottom may have been put in for most tech stocks, others were less certain.

“We did get the hawkish statements out of the Fed [Wednesday], and even though they’re going to be stiff headwinds for tech stocks and other aggressive growth companies, the data is now known. And when it’s known, it’s absorbed in the market,” Paul Meeks, Independent Wealth Solutions Management portfolio manager, told Yahoo Finance. “The thing that I still worry about, and it keeps me away from go all-in in tech, is what’s going on in Eastern Europe, because if we still have geopolitical risks, we still have risks to these stocks.”

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7:29 a.m. ET: St. Louis Fed President Bullard calls for Fed to hike rates to more than 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} this year

St. Louis Fed President Jim Bullard said Friday that he wanted the Federal Reserve to more swiftly raise interest rates and begin the process of reducing its nearly $9 trillion balance sheet in order to bring down inflation.

Bullard was the only member of the Federal Open Market Committee to dissent with the Fed’s decision this week to raise interest rates by 25 basis points. Instead, Bullard wanted the Fed to raise by 50 basis points and also implement a plan to reduce the balance sheet.

“The combination of strong real economic performance and unexpectedly high inflation means that the Committee’s policy rate is currently far too low to prudently manage the U.S. macroeconomic situation,” Bullard said in a statement. “Moreover, U.S. monetary policy has been unwittingly easing further because inflation has risen sharply while the policy rate has remained very low, pushing short-term real interest rates lower. The Committee will have to move quickly to address this situation or risk losing credibility on its inflation target.”

Bullard said that in his dot on the “dot plot,” or Fed’s Summary of Economic Projections, he saw the Fed raising rates to above 3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996} this year.

“This would quickly adjust the policy rate to a more appropriate level for the current circumstances,” Bullard said. “The Committee has successfully moved in this manner before. In 1994 and 1995, the Committee made a similar discrete adjustment to the policy rate to better align it with the macroeconomic circumstances at that time. The results were excellent.”

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7:11 a.m. ET: Stock futures fall, giving back some gains

Here’s where markets were trading heading into the opening bell Friday morning:

S&P 500 futures (ES=F): -30.75 points (-0.7{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,379.50
Dow futures (YM=F): -200 points (-0.58{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,261.00
Nasdaq futures (NQ=F): -104.75 points (-0.74{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,007.00
Crude (CL=F): +$1.34 (+1.3{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $104.32 a barrel
Gold (GC=F): -$7.50 (-0.39{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to $1,935.70 per ounce
10-year Treasury (^TNX): +13.6 bps to yield 2.1400{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}

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6:13 p.m. ET Thursday: Stock futures

Here’s where stocks were trading Thursday evening:

S&P 500 futures (ES=F): -16.25 points (-0.37{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 4,394.00
Dow futures (YM=F): -140 points (-0.41{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 34,321.00
Nasdaq futures (NQ=F): -48.25 points (-0.34{21df340e03e388cc75c411746d1a214f72c176b221768b7ada42b4d751988996}) to 14,063.50

NEW YORK, NEW YORK - MARCH 16: Traders work on the floor of the New York Stock Exchange (NYSE) on March 16, 2022 in New York City. The Dow started off the day in positive territory, extending yesterday's rally. (Photo by Spencer Platt/Getty Images) — NEW YORK, NEW YORK – MARCH 16: Traders work on the floor of the New York Stock Exchange (NYSE) on March 16, 2022 in New York City. The Dow started off the day in positive territory, extending yesterday’s rally. (Photo by Spencer Platt/Getty Images)

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter