U.S. stocks end a tad higher as Tesla rallies

The S&P 500 closed higher on Friday but off session highs, as a Tesla rally failed to galvanize the broader market on the eve of the Federal Reserve's policy meeting and inflation data next week.

Tesla Inc shares TSLA climbed 4.06%, clinching their longest winning streak since January 2021, after General Motors Co GM agreed to use the company's Supercharger network. GM shares GM rose 1.06%.

The benchmark S&P 500 SPX built on Thursday's 20% rise from its Oct. 12 finishing low, heralding the start of a new bull market as defined by some market participants.

"It's maybe the most hated bull market in the history of bull markets," said Tim Holland, chief investment officer of investment platform Orion OCIO.

"Sentiment was terribly depressed going into year-end and still remains on the bearish side."

The S&P 500 SPX gained 4.93 points, or 0.11%, at 4,298.86, taking this week's advance to 0.38% and extending its winning streak to four weeks, the longest since the July-August 2022 period. The Nasdaq Composite notched its seventh straight week of gains, IXIC adding 20.62 points, or 0.16%, to 13,259.14 on the day and 0.13% on the week. The Dow Jones Industrial Average DJI rose 43.17 points, or 0.13%, to 33,876.78, for a weekly gain of 0.33%.

A megacap stocks rally, better-than-expected earnings season and expectations that the Fed was nearing the end of its rate-hiking cycle have supported Wall Street this year despite concerns about a looming recession and sticky inflation.

Shares in tech companies including Apple Inc AAPL, Advanced Micro Devices AMD and Nvidia Corp NVDA rose between 0.22% and 3.20% after retreating earlier this week.

Traders see a 72% chance of the U.S. central bank holding interest rates at the current 5%-5.25% range in its June 13-14 policy meeting, according to CMEGroup's Fedwatch tool.

"The overall tone of the market is based on the idea that the Fed will pause its increases," said Rick Meckler, partner at Cherry Lane Investments. "As it pauses, the broader market will start to rally and maybe catch up with the large-cap tech stocks that have led the way up until now."

Consumer prices data on Tuesday will help shape expectations around further moves by the Fed, with traders already pricing in a 50% chance of another 25-basis-point rate hike in July.

The CBOE Volatility index VIX, commonly known as Wall Street's fear gauge, sank to the lowest level since February 2020 before regaining some ground.