04:48 PM EST, 01/03/2025 (MT Newswires) -- US benchmark equity indexes rose Friday as traders parsed the latest manufacturing sector data and remarks by a Federal Reserve official.

The Nasdaq Composite gained 1.8% to 19,621.7, while the S&P 500 increased 1.3% to 5,942.5. The Dow Jones Industrial Average advanced 0.8% to 42,732.1. Consumer discretionary led the gainers among sectors, while materials closed little changed. No sector posted a loss.

For the week, the Dow fell 0.6%, while the S&P 500 and the Nasdaq dropped 0.5% each.

In economic news, the US manufacturing sector's contraction improved in December as demand grew, the Institute for Supply Management's survey showed.

"On balance, the report suggests manufacturers ended the year with a hint of optimism, but they could face some pretty stiff challenges in the new year," BMO Capital Markets said.

On Thursday, a survey by S&P Global ( SPGI ) showed that the US manufacturing sector remained in contraction territory last month amid declines in output and new orders, while sentiment reached the lowest since August.

The US two-year yield rose 3.7 basis points to 4.29% Friday, while the 10-year rate increased 2.7 basis points to 4.60%.

Richmond Fed President Tom Barkin said that his 2025 baseline expectation for the US economy is positive amid strong consumer spending, though there are risks on the inflation front.

"I expect the story for the coming year to be more about supply and demand -- and perhaps geopolitics -- than monetary policy," Barkin said. "Were employment to falter or inflation to reemerge, we have the tools to respond."

West Texas Intermediate crude oil gained 1.2% to $74.03 a barrel Friday.

In company news, Nvidia ( NVDA ) is expected to announce new gaming products at the upcoming CES tech show, while investors will seek updates on the path of the company's generative artificial intelligence sales, Wedbush Securities said in a client note. The chip-making giant's shares jumped 4.5%, the top gainer on the Dow.

Tesla (TSLA) was among the best performers on the S&P 500 and the Nasdaq, up 8.2%. The electric vehicle maker's sales in China reached a record high in 2024, Reuters reported. Separately, Evercore ISI adjusted its price target on the Tesla stock to $275 from $195.

Adobe (ADBE) shares fell 2.4%, the biggest decline on the Nasdaq, as UBS adjusted its price target on the software maker's stock to $475 from $525.

President Joe Biden blocked United States Steel's ( X ) proposed acquisition by Japan's Nippon Steel, citing national security concerns and supply chain risks. The US steelmaker's shares slumped 6.5%.

Gold fell 0.7% to $2,650.70 per troy ounce, while silver rose 0.7% to $30.1 per ounce.