The major averages finished out the week on a high note with the S&P 500 closing at a new high up 44 points or 0.95%, capping off Wall Street's strong rally this week, despite inflation hitting a 39-year high.The Dow Jones Industrial Average gained 216 points, or 0.6%, to 35,970. The technology-focused Nasdaq Composite climbed 0.7%  or 113 points to 15,630.

The S&P 500 and Nasdaq Composite completed their best week since February and the Dow had its best weekly performance since March.

Inflation soared 6.8% year-over-year in November to highest rate since 1982, the Labor Department said Friday. The print came in slightly higher than the 6.7% Dow Jones estimate. The consumer price index, which measures the cost of a wide-ranging basket of goods, rose 0.8% for the month.

Core CPI, which excludes food and energy prices, rose 0.5% for the month and 4.9% from a year ago, in line with estimates.

Some investors may have been anticipating an even hotter inflation reading than economists, leading to a relief rally following the number. DoubleLine's Jeffrey Gundlach said in a call this week he fears inflation could soon top 7%.

A bright spot of the CPI report was that increases in used cars, lodging, and airfares were all lower than expected, said Detrick. These areas have been stubbornly high and this could be one of the first signs that inflation could be nearing a peak, he added.

Investors are also wary that a high inflation reading could lead the Federal Reserve to hasten the taper of its $120-billion monthly bond-buying program.

Oracle shares soared 15.6% on Friday, a day after the company posted better-than-expected quarterly results.

Airlines ticked lower on Friday. Southwest Airlines dropped 3.8% following another downgrade on Wall Street, this time from Goldman Sachs.

Interactive fitness company Peloton added to its woes, slipping 5.4% after tumbling 11.3% on Thursday. Credit Suisse cut its view on the company, saying a return to gyms and shifts in consumer spending will weigh on profitability.

Friday's moves came after the major averages ended the regular trading session lower, each snapping a three-day win streak.

Nevertheless, stocks rebounded nicely this week from the recent omicron sell-off. The Dow Jones Industrial Average rose 4% since Monday, snapping a 4-week losing streak. The S&P 500 and Nasdaq Composite added 3.8% and 3.6%, respectively, this week.