On Wall Street Friday, more gains by the shares of Google parent Alphabet and software giant Microsoft propelled the market to its best week since November.

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The S&P 500 Index rallied 1 per cent to finish its first winning week in the past four. The Dow Jones Industrial Average rose 153 points, or 0.4 per cent, and the technology heavy Nasdaq Composite Index surged 2 per cent.

Alphabet shares soared more than 10.2 per cent after the company breezed past analysts’ expectations for profit in its latest quarter.

The Google patent also said it would start paying a dividend to investors, and authorised a program to buy back up to $US70 billion ($107 billion) of its stock – both moves taken by investors as a clear signal of just how much cash its generating.

Microsoft also reported stronger profit and revenue than the consensus estimates of analysts, sparking a 1.8 per cent jump in its shares. The company cited strong growth in its cloud-computing business for the impetus as it rolls out artificial intelligence technology to its customers.

The two big-tech company gains helped offset a 9.2 per cent drop in the shares of chipmaker Intel, which reported a stronger profit for its latest quarter. However, its revenue fell short of analysts’ estimates, and it also gave a bearish profit forecast in its current quarter.

Treasury yields largely eased, with the yield on the 10-year bond dipping to 4.66 per cent, from 4.71 per cent late Thursday. The two-year Treasury yield, which more closely tracks expectations for the Fed, edged down to 4.99 per cent, from 5 per cent.

While US inflation remains hotter than forecast, EY chief economist Gregory Daco expects it to cool in coming months as shoppers pressured in part by slowing wages growth cut their purchases, which is the fuel that gives inflation energy.

“Consumers remain willing to spend, but not on anything, nor at any price,” he said.

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“The economy remains on solid footing,” Bank of America economists said in a report, pointing to solid buying trends from US customers. Such an interpretation calms worries that the economy could be heading for a toxic mix of stagnating growth and high inflation – something that the Fed does not have great tools to fix.

Friday’s report on sticky inflation “underscores Vanguard’s belief that the Federal Reserve may find it’s unable to cut interest rates this year,” according to the investment giant’s global head of portfolio construction, Roger Aliaga-Diaz.

If interest rates stay high, companies would need to continue to produce strong profits to justify their lofty stock valuations. So far this reporting season, the earnings trend has been better than expected, with three out of four companies topping analysts’ profits forecasts, according to FactSet.