US stocks ended a three-week streak of losses Friday, as investors acclimated to the new reality of inflation and Fed money-tightening.

The S&P 500 completed two consecutive days of gains to close up over 3%, producing the first up week since the end of May. The 6% weekly rise was also the second best week of 2022 thus far. The Dow was up 2.7%, or over 800 points while the Nasdaq was up over 3.3%.  The gains held, even as a new print on consumer sentiment was revised down to a new record low, although consumers’ one-year inflation expectations also dropped.

Trading was volatile over the week as investors swayed back and forth between the immediate effect of the Fed’s monetary tightening and the risks of recession inherent to it, vs the fact inflation has to be dealt with before it began to inflict demand destruction. Fed Chair Jerome Powell’s statements to Congress this week acknowledging the risks, and his need to tread gently and try to avoid triggering a recession seemed to calm fears somewhat.

Diane Jaffee, group managing director and senior portfolio manager of TCW Group said, “Really, investors want the chair to understand that inflation is a significant problem and that dealing with it earlier is actually better for the long-term. So I think investors are taking heart that the Fed is going to do whatever it takes.”

Powell’s recent statements acknowledging the risks of rate hikes have been echoed by a number of big names on Wall Street who have recently raised their forecast probabilities of a recession near-term.

Stocks which tend to be cyclical, like energy and materials, were down due to being seen as more vulnerable in the early stages of slowing the economy, WTI crude settled around $107 a barrel as it had its third down week in a row, and its first down month since November.

After tumbling earlier this week on recessionary fears, Treasury yields were up across the curve, with the 10-year benchmark returning to above 3.10% after topping 3.31% at the week’s start.