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STORY: Wall Street closed sharply higher on Friday as signs of peaking inflation and consumer resiliency sent investors into the Memorial Day weekend with growing optimism that the Federal Reserve will be able to tighten monetary policy without tipping the economy into a recession.

All three major U.S. stock indexes brought a decisive end to their longest weekly losing streaks in decades.

The Dow rose over 1.7%, the S&P 500 gained more than 2.4%, and the Nasdaq rose more than 3.3%.

Liz Miller, President of Summit Place Financial Advisors, says that the Personal Consumption Expenditures price index shows that the worst of inflation may be over.

“Today we’re having some pretty good strength on the back of the PCE report this morning, which is showing that potentially core inflation has sort of peaked this Spring – whether it was March or maybe April showing a little bit of a downturn, but hopes that these higher rates are working and that other tightening in our economy is potentially bringing inflation in line.”

The S&P and Nasdaq had suffered seven consecutive weekly declines, the longest since the end of the dot-com bust, while the blue-chip Dow's eight-week selloff was its longest since 1932.

Generally upbeat earnings guidance and solid economic indicators have fueled hopes that the Fed's hawkish maneuvers to contain decades-high inflation will not cool the economy into contraction.

Among the biggest gainers for stocks: Apple, Microsoft and Tesla.