The S&P 500 rose 61.35 factors, or 1.5%, to 4173.85 on Friday, with beneficial properties accelerating within the afternoon. The Dow Jones Industrial Common added 360.68 factors, or 1.1%, to 34382.13. The Nasdaq Composite superior 304.99 factors, or 2.3%, to 13429.98. The beneficial properties constructed on a rally that started Thursday, when main indexes snapped a three-session shedding streak.

Nonetheless, shares ended the week with losses. The S&P 500 and Dow every misplaced a minimum of 1.1%. The tech-heavy Nasdaq was the toughest hit, shedding 2.3% for the week and logging its fourth consecutive week of declines, the longest such stretch since August 2019.

Shares tumbled earlier within the week after new information confirmed that shopper costs leapt to a 13-year excessive in April. Costs on all the pieces from vehicles to hotel-room charges rose, fueled by robust demand from customers as Covid-19 restrictions have been eased and provide shortages. Buyers fear {that a} surge in costs for uncooked supplies will eat into revenue margins and a burst of consumer-price inflation may additionally immediate the Federal Reserve to pare again easy-money insurance policies which have buoyed shares.

Buyers fled shares, significantly among the fast-growing corporations that many had favored over the previous yr. The S&P 500 and Dow suffered their worst three-day losses in almost seven months to begin the week.

Some sectors have been tougher hit. The S&P 500 development index fell 2.1% this week, its worst week since February. ARK Funding Administration’s flagship innovation exchange-traded fund misplaced 4.9% this week, whereas Tesla shares dropped 12%. Bitcoin costs additionally sputtered as Tesla Chief Govt

Elon Musk

mentioned the corporate suspended accepting bitcoin as fee for its automobiles.

The inflation fears and falling share costs triggered a surge in bearish choices exercise tied to the S&P 500, with some merchants positioning for steeper declines. Bearish choices altering palms hit the best degree of the yr on Wednesday, Commerce Alert information present, whereas a measure of inventory volatility jumped this week.

The federal government bond market didn’t provide a hedge to buyers trying to defend themselves from the volatility of the inventory market, as buyers additionally offered Treasurys on worries about inflation. The yield on 10-year Treasury notes rose to 1.639%, up from 1.576% final week. Yields rise when bond costs fall and rising inflation chips away on the buying energy of the bonds’ mounted funds.

However a number of Fed officers have mentioned in latest days that the central financial institution has no plan to withdraw assist, serving to to rapidly calm markets and fueling the rebound. The Fed must see a number of extra months of information on jobs and inflation earlier than figuring out when to start tightening financial insurance policies, Gov.

Christopher Waller

mentioned Thursday.

Some buyers and analysts mentioned they have been reluctant to attract conclusions from the info launched this week and remained assured that the Fed can be affected person by way of elevating rates of interest.

Consumers have quickly stepped in to the market. U.S. inventory funds drew probably the most inflows since March within the week ending Might 12, in response to EPFR. That made it the seventh consecutive week of inflows to U.S. inventory funds regardless of the turbulence, the longest such streak for the reason that second quarter of 2018.

“The Fed has been very constant,” mentioned

Paul Donovan,

chief economist at UBS World Wealth Administration. “That’s telling you one thing: it’s telling you [higher inflation] clearly is transitory.”

Nonetheless, Mr. Donovan mentioned he expects markets to stay jumpy in response to greater inflation numbers within the coming months. “There might be volatility within the close to time period over this: not simply volatility over inflation, however volatility over the central financial institution response to that,” he mentioned.

Retail gross sales have been unchanged in April from a month earlier than, the Commerce Division mentioned. Economists had anticipated an increase of 0.8%, following a surge in spending in March, when authorities stimulus checks boosted family incomes. And recent information launched early Friday confirmed that shopper sentiment weakened in Might as inflation expectations ticked up.

Regardless of the stock-market rebound, some buyers mentioned they thought the market was nonetheless due for a pullback after its super run-up this yr. Many particular person buyers have jumped into the market, usually shopping for on small dips in shares. And even after this week’s declines, the S&P 500 is off simply 1.4% from its document hit on Might 7.

“I really feel like we’re overdue for a bit of little bit of a breather. Earning profits isn’t purported to be this simple. It’s not purported to be a a method commerce,” mentioned John Porter, chief funding officer of equities at Mellon Investments.

In company information,

Walt Disney

shares fell $4.64, or 2.6%, to $173.70 after the corporate mentioned late Thursday that its flagship streaming service added fewer customers than Wall Road had anticipated in its fiscal second quarter after months of torrential development.

Whereas the Covid-19 streaming growth is slowing for now, different pandemic tendencies seem like stickier.

DoorDash

gained $25.58, or round 22%, to $141.07 after saying income tripled within the first quarter, exhibiting sustained demand for food-delivery providers at the same time as coronavirus vaccinations picked up.

A few of particular person buyers’ favourite shares have been amongst different vivid spots available in the market this week, persevering with a string of untamed strikes for meme shares. Reddit-favorite AMC Leisure climbed 36% this week.

Hertz World Holdings

shares have nearly doubled this week as prospects brightened for stockholders within the firm, which is ready to emerge from chapter.

Brent-crude futures, the benchmark in vitality markets, rose for the third consecutive week to $68.71. Copper futures in New York, which hit a document Tuesday, slipped 0.9% to $4.66.

A latest surge in commodity costs has sharpened focus amongst buyers on corporations which might be more likely to see earnings pinched by greater enter prices.

Inventory markets all over the world additionally notched beneficial properties. In abroad markets, the Stoxx Europe 600 gained 1.2% Friday. Main Asian markets rallied. Japan’s Nikkei 225 gained 2.3% and China’s Shanghai Composite Index rose 1.8%.

“We nonetheless suppose the inventory market has an upside from right here till the yr finish,” mentioned Melda Mergen, deputy world head of equities at Columbia Threadneedle.

Write to Joe Wallace at joe.wallace@wsj.com and Gunjan Banerji at gunjan.banerji@wsj.com.