The Dow Jones industrial average rose 205.60 points, or 0.8 percent, to 25,574.73, the Nasdaq composite gained 58.21 points, or 0.8 percent, to 7,211.78 and the Russell 2000 index of small-cap stocks surged 26.99 points, or 1.7 percent, to 1,586.79.
The S&P 500 rose 19.33 points, or 0.7%, to a record 2,767.56.
While a quick jump in rates could easily jolt markets out of the calm ride they've been on, investors say markets are prepared for a gradual rise. Whether investors are anxious about a future pickup in rates or about how stocks have become more expensive than usual, any dip for the market over the past year has been shallow and short. Whether investors are anxious about a pickup in rates in the future or about how stocks have become more expensive than usual, any dip for the market over the past year has been shallow and short. But he expects the market to continue gliding higher as the economy and corporate profits strengthen.
Businesses will need to produce strong growth to justify the gains their stocks have made.
Wall Street rose to record highs on Friday as fourth-quarter earnings season kicked off with solid results from JPMorgan and BlackRock and robust retail sales drove gains for consumer stocks. Shares of the San Diego company, which makes tools for genetic analysis, climbed 6.9% to $242.80.
The S&P consumer discretionary index jumped 0.81 percent after an increase in retail sales showed households bought more goods and figures for the prior month were revised higher, suggesting the economy exited 2017 with strong momentum.
Strategists at Goldman Sachs say the tax changes will account for more than a third of the 14% growth they're forecasting for S&P 500 earnings per share in 2018.
Rising health care stocks helped to overshadow weakness for telecoms and other dividend-paying stocks, which fell as bond yields rose.
SEASON'S GREETINGS: Target became the latest retailer to say it enjoyed a strong holiday season, and it raised its profit forecast for the year. The pause for stocks came as Treasury yields continued their upward climb, and the 10-year yield. Low rates also make bonds less attractive, which pushes investors into stocks.
Telecom stocks in the S&P 500 dropped 1.8%, the worst-performing sector in the index.
Investors have always been preparing for a gradual increase in bond yields, and Hartman said stocks can keep climbing as long as rates do rise at a measured pace. Financial stocks in the S&P 500 rose 0.8 percent.
When interest rates rise, banks can make bigger profits from making loans.
In the commodities markets, benchmark US crude rose 50 cents to settle at $64.30 per barrel.
The dollar dipped to 111.09 Japanese yen from 111.35 late Wednesday. The British pound fell to $1.3534 from $1.3564. Brent crude, the global standard, gained 10 cents to $67.88 per barrel. Copper rose 2 cents to $3.23 a pound.
In the commodities markets, gold rose $3.20 to settle at $1,322.50 an ounce. Silver fell 13 cents to $17.01 an ounce.
BlackRock (BLK.N) rose 3 percent after the world's largest asset manager reported profit that beat estimates as investors flooded into the relatively low-priced funds.
In markets overseas, Japan's Nikkei 225 fell 0.3 percent, South Korea's Kospi retreated 0.5 percent and Hong Kong's Hang Seng index edged 0.2 percent higher. South Korea's Kospi lost 0.1%.
France's CAC 40 gained 0.5 percent, the FTSE 100 in London rose 0.2 percent and Germany's DAX climbed 0.3 percent.
This article was originally published at 8:20 a.m.