The Dow Jones Industrial Average hit a new record high on Friday, while the S&P 500 logged its eighth consecutive weekly advance.
The Dow rose 0.6% to settle at 50,579.7, logging an all-time closing high for a second day in a row. The S&P 500 ended 0.4% higher at 7,473.5, while the Nasdaq Composite added 0.2% to 26,344. Barring communication services and consumer staples, all sectors were in the green, led by healthcare.
US markets are closed on Monday for the Memorial Day holiday.
This week, the Dow gained 2.1%, the S&P 500 advanced 0.9%, and the Nasdaq climbed 0.5%.
Kevin Warsh formally assumed leadership of the Federal Reserve on Friday, replacing former Chair Jerome Powell amid growing signs of division at the central bank as inflation heats up.
Warsh's nomination by US President Donald Trump had raised concerns about the central bank's independence.
"Markets increasingly believe that the (Federal Open Market Committee) -- and its new chair -- will act to burnish their inflation-fighting credentials and keep their independence intact," Scott Anderson, chief US economist at BMO, said in a report Friday. "This likely means holding policy rates higher for longer to prevent higher energy prices from feeding into longer-term inflation expectations."
Fed officials flagged the possibility of raising interest rates if the Middle East conflict dragged on and kept inflation above the 2% goal, minutes from the central bank's April meeting showed Wednesday.
Fed Governor Christopher Waller said Friday he is prepared to be patient in holding monetary policy at its current restrictive stance as the Middle East conflict continues to evolve.
"If I believe inflation expectations start to become unanchored, I would not hesitate to support an increase in the target range for the federal funds rate," Waller said. "But at this point, that action is premature."
West Texas Intermediate crude oil was up 0.3% at $96.68 a barrel in Friday late-afternoon trade, while Brent rose 1.2% to $103.78. Both benchmarks were on track for weekly declines.
"Markets are still searching for signs of progress in a potential deal between the US and Iran," ING Bank said in a report Friday. "While there are signs of optimism, uncertainty reigns."
A Qatari negotiating team arrived in Iran Friday to help secure a deal to end the conflict, Reuters reported, citing an unnamed source.
US Treasury yields were mixed, with the 10-year rate last down one basis point at 4.56% and the two-year rate rising four basis points to 4.13%.
In company news, Dell Technologies (DELL) shares soared nearly 17%, the top gainer on the S&P 500, as Wells Fargo raised its price target on the stock to $270 from $180.
Take-Two Interactive Software (TTWO) shares fell 4.4%, the second worst performer on the S&P 500. Late Thursday, the video game publisher logged a smaller-than-expected fiscal fourth-quarter loss and said it was on track to launch the highly anticipated "Grand Theft Auto VI" Nov. 19.
In economic news, US consumer sentiment declined to a fresh record low in May as people fear that high gasoline prices could erode their purchasing power, according to a survey by University of Michigan.
"Consumer sentiment fell for the third straight month as supply disruptions in the Strait of Hormuz continue to boost gasoline prices," Surveys of Consumers Director Joanne Hsu said. "The cost of living continues to be a first-order concern, with 57% of consumers spontaneously mentioning that high prices were eroding their personal finances, up from 50% last month."
Gold was last down 0.7% at $4,509.10 per troy ounce, while silver lost 1% $75.96 per ounce.
