NEW YORK (AP) — Wall Street's rally got back on track Friday following more encouraging profit reports and the latest signal that inflation is loosening its chokehold on the economy.

The S&P 500 rose 1% to its highest close in more than 15 months. The Dow Jones Industrial Average climbed 176 points, or 0.5% after breaking a 13-day winning streak the day before. The Nasdaq composite jumped 1.9% as Big Tech stocks led the market.

Stocks have been rising recently on hopes high inflation is cooling enough to get the Federal Reserve to stop hiking interest rates. That in turn could allow the economy to continue growing and avoid a long-predicted recession. The S&P 500 closed out its third straight winning week and its ninth in the last 11.

A report on Friday bolstered those hopes, saying the inflation measure the Fed prefers to use slowed last month by a touch more than expected. Perhaps just as importantly, data also showed that total compensation for workers rose less than expected during the spring. While that's discouraging for workers looking for bigger raises, investors see it adding less upward pressure on inflation.

The hope among traders is that the slowdown in inflation means the Federal Reserve's hike to interest rates on Wednesday will be the final one of this cycle. The federal funds rate has leaped to a level between 5.25% and 5.50%, up from virtually zero early last year. High interest rates work to lower inflation by slowing the entire economy and hurting prices for stocks and other investments.

Critics, though, say the stock market's rally may have gone too far, too fast. The full effects of the Fed's rate hikes have yet to make their way fully through the system. Other parts of the economy could still crack under the pressure, like the three U.S. bank failures this spring that shook confidence. Plus, inflation remains above the Fed's target level, and the central bank could have to keep the brakes on the economy a while to get it down to target.

"Don't underestimate central bank commitment to 2% inflation," Bank of America economists wrote in a BofA Global Research report.

Still, hopes for a halt to rate hikes helped technology stocks and others seen as big beneficiaries from easier rates to rally and lead the market Friday.

Microsoft, Apple and Amazon each rose at least 1.4% and were the three strongest forces pushing upward on the S&P 500.

Companies also continued to deliver stronger profits for the spring than analysts expected. Roughly halfway through the earnings season, more companies than usual are topping profit forecasts, according to FactSet.

Intel rose 6.6% after reporting a profit for the latest quarter, when analysts were expecting a loss.

Food giant Mondelez International climbed 3.7% after reporting stronger results for the spring than expected. The company behind Oreo and Ritz also raised its forecasts for financial results for the full year.

On the losing end was Exxon Mobil. It fell 1.2% and was the heaviest single weight on the S&P 500. It reported weaker profit for the spring than expected, though its revenue topped forecasts.

All told, the S&P 500 rose 44.82 points to 4,582.23. The Dow added 176.57 to 35,459.29, and the Nasdaq jumped 265.55 to 14,316.66.

In stock markets abroad, Japan's Nikkei 225 slipped 0.4% after the Bank of Japan made moves that could allow longer-term interest rates to rise. Stocks rose in China and were modestly higher across Europe.

In the bond market, the yield on the 10-year Treasury fell to 3.95% from 4.00% late Thursday. It helps set rates for mortgages and other important loans.

The two-year Treasury, which moves more on expectations for what the Federal Reserve will do, fell to 4.87% from 4.92%.

Yields dipped after a survey said sentiment among U.S. consumers wasn't quite as high in July as thought, though it was still the strongest reading since October 2021.

The report from the University of Michigan also said expectations for inflation inched up in July but remain well below where they were last year. The Fed wants to keep such expectations anchored because it fears a vicious cycle where expectations for high inflation only worsen it.

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AP Business Writer Elaine Kurtenbach contributed.