The dollar reversed its 2023 advance after a $2.7 trillion rally in November, fuelled by speculations that the Federal Reserve will cease its raising cycle to avoid a recession.

The S&P 500 traded above 4,500, marking its third straight week of gains - the longest streak since July. A large number of derivatives contracts tied to stocks and indexes matured, which typically amplifies volatility. Applied Materials fell on the news that it is under criminal investigation in the United States for allegedly violating export restrictions to China. Homebuilders rose as new home construction increased.

The dollar had its worst week in four months, with softer-than-expected economic data bolstering predictions that the Fed is done raising rates. Ten-year US yields were little changed, while oil rose but fell for the fourth week in a row due to supply pressures.

Traders also paid close attention to the latest Fedspeak, with Fed Vice Chair for Supervision Barr reiterating that officials are likely nearing the end of their tightening campaign, but Fed Bank of San Francisco President Daly said policymakers are not certain inflation is on track to reach their 2% target.