Stocks rose as concerns over further interest rate hikes faded, with major indexes posting gains in afternoon trading. Investors grew more confident that the Federal Reserve's tightening cycle may be nearing its end following softer economic data.

Treasury yields fell across the curve, with the 10-year yield dropping to its lowest level in weeks. The decline reflected easing inflation expectations and a shift in market sentiment toward risk assets.

In corporate news, Nvidia agreed to buy Hugging Face, the AI startup known for its open-source machine learning tools. The deal underscores Nvidia's push to expand its footprint in artificial intelligence software beyond its dominant chip business.

Market strategists noted that the combination of falling yields and AI-driven deal activity helped fuel the rally, particularly in technology and growth-oriented sectors.