U.S. stocks extended advance after the latest inflation measure indicated a downward trend and the falling yield boosted sentiment in the stock market. 

The S&P 500 index jumped 2.4% to 4,158.30 and the Nasdaq Composite index advanced 3.3% to 12,131.13. 

After eight weeks of selling investors were ready to embrace any news that offered a glimmer of hope. 

Household consumption increased for the fourth month in a row in April but disposable income after adjusting for inflation was nearly flat indicating consumers are dipping in savings and wages are not rising at the rate of inflation.

The data released by the Commerce Department also indicated that the Personal Consumption Expenditures or PCE price index, the Fed's preferred measure of inflation,  slowed to 6.3% in April after rising at 6.6% in March.

On a monthly basis, the PCE rose 0.2% in April after rising at 0.9% in March. 

However, the core PCE which excludes volatile food and energy prices decelerated to 4.9% in April after rising at 5.2% in March.  

The PCE is different from the Consumer Price Index and takes into account a change in consumer behavior when prices rise and consumers substitute for cheaper alternatives. 

A slight decline in the inflation measure and better than expected results from tech and retail companies was enough to bolster market sentiment. 

Ulta Beauty jumped 11% to $419.75 and erased losses in the year after the cosmetic retailer reported better than expected earnings and lifted earnings and revenues outlook for the year. 

However, Big Lots, Burlington Stores, Gap Inc, and Hibbett Inc struggled in the quarter as consumers retrenched. 

Retailers are battling shifting demand trends where consumers are ready to substitute lower priced groceries in search of discounts but at the same time are ready to splurge for high end items or experiences. 

Bloomingdale's owned by Macy's reported quarterly same store sales increased 28% but Burlington Northern and Big Lots sales plunged more than 10%. 

Tech-heavy Nasdaq soared nearly 3% after the software developer Autodesk Inc, computer and systems maker Dell Technologies, chip maker Marvell Technology, and cyber security provider Crowdstrike Holdings reported better than expected quarterly results. 

 But it was the decline in yield in the bond market that supported a rally in tech and high-growth stocks where profits are in the distant future if any. 

The yield on 10-year Treasury notes declined to 2.74% after rising as much as 3.25% last week.

The stocks rally was sustained and gathered steam in the late afternoon as investors raced to add exposure to battered tech stocks ahead of a 3-day weekend. 

For the year, the Nasdaq Composite index is still down 24% and the S&P 500 lower 13%.   

Futures of crude oil jumped 1% to $115.09 a barrel but natural gas declined 2% to $8.74 a unit. 

Unleaded gasoline price at pumps across the nation is still near record high of $4.59 a gallon, a 40% increase from $3.04 a year ago according to the data released by AAA. 

The automobile association expects 39.2 million people to travel more than 50 miles this weekend, an increase of 8.3% from a year ago but down 7.2% from 2019. 

The gasoline prices are not likely to ease at least till July as futures of gasoline trade near record high prices.