Investors are betting that the U.S. economy will rev up in coming months, dumping government bonds and piling into economically sensitive sectors of the stock market.
The S&P 500 ticked higher 0.4%. The Nasdaq Composite added 0.8%. The Dow Jones Industrial Average added around 144 points, or 0.5%.
In bond markets, the yield on the 10-year Treasury note rose to 1.338%, from 1.286% on Thursday.
The jump in stocks and bond yields comes as the economy seems to improving, stoking enthusiasm about a speedy recovery.
On Friday, new data showed that business activity in the U.S. private sector held up, boosted by accelerating service activity and manufacturing output. That followed a report Wednesday that showed consumers used stimulus checks to boost retail spending in January to the largest increase in seven months. Some economists have increased estimates of gross domestic product for the first quarter of the year.