STORY: U.S. stocks closed up on Friday, as investors weighed fresh data that showed slowing inflation against rate hike and recession fears.

The Dow and S&P each gained more than half a percent, while the Nasdaq added two-tenths of a percent.

The personal consumption expenditures price index, or PCE, the Fed's preferred inflation gauge, showed that prices continued to cool in November - rising just a tenth of a percent last month after climbing point-4% in October.

William Northey is Senior Investment Director at U.S. Bank Wealth Management.

“Some of the more pertinent factors that are impacting the market today are certainly a confirmation of decelerating inflation. We saw the PCE come out today and it confirmed what we'd seen out of the CPI just last week, which is several consecutive months of lower levels of year over year inflation. And that really plays into the context of, how will the Federal Reserve respond to lessening inflationary pressures as we turn the calendar into 2023.”

Investors have been jittery since last week when the Fed vowed to stay the course until it achieves its 2% inflation goal and projected rate hikes to above 5% in 2023, a level not seen since 2007.

Energy shares were the biggest advancers throughout the session as oil prices gained following news of Moscow's plans to cut crude output.

Tesla’s shares at one point touched a more than two-year low as CEO Elon Musk's promise to not sell his shares for at least two years did not reassure investors.

And shares of News Corp gained sharply after a report that billionaire businessman Michael Bloomberg was interested in acquiring either its subsidiary Dow Jones, owner of the Wall Street Journal, or rival newspaper the Washington Post.