The major averages finally had a good day on cooler inflation data after the rate cut earlier in the week. The Dow Jones Industrial Average jumped 498 points or 1.18%. The S&P 500 rose 62 points or 1.095 while the Nasdaq rose 199 points or 1.03%.

All 11 sectors of the S&P 500 closed higher, with real estate and information technology among the best performers. Just 53 stocks in the broad S&P 500 index closed lower on Friday.

Even as the major averages jumped on Friday, all three booked losses on the week. The Dow fell 2.2%, notching its third straight losing week. The S&P 500 fell almost 2% on the week, while the Nasdaq Composite dropped 1.7%. The weekly losses were exasperated on Wednesday when the Dow dropped or 1100 points while the S&P 500 and Nasdaq fell 2.5% or more.

Bonds were in focus this week. The yield on the 10-year Treasury fell 4.4 basis points to 4.52% after topping 4.57% the previous session. The 2-year Treasury yield dipped just one basis point to 4.31%. The November personal consumption expenditures price index, the Fed's preferred measure of inflation, increased just 0.1% from October. The gauge indicated a 2.4% inflation rate on an annual basis, still ahead of the Fed's 2% goal but lower than the 2.5% estimate from economists surveyed by Dow Jones.

In Washington, all eyes are on Congress as the Trump-endorsed House Republican measure to fund the government for three months and avert a government shutdown failed on Thursday. Without a deal, a partial shutdown is slated to start late Friday night.