(Updates to 14:44 EDT)

By Stephen Culp

NEW YORK, May 24 (Reuters) - Wall Street rebounded and

Treasury yields paused after upbeat economic data on Friday as

investors positioned themselves ahead of the long U.S. Memorial

Day weekend and the unofficial start to summer.

The U.S. stock market's bounce-back caps a week in which minutes

from the most recent Federal Reserve policy meeting struck a

hawkish tone, economic data hinted at the possibility of rising

inflation and megacap chipmaker Nvidia's ( NVDA ) beat-and-raise

earnings report re-ignited investors' AI fervor.

The tech-heavy Nasdaq led all three major U.S. stock indexes

higher in a broad-based rally.

"After yesterday's very rough day it was nice to see the bulls

make a stand ahead of the long holiday weekend," said Ryan

Detrick, chief market strategist at Carson Group in Omaha. "The

economy continues to surprise to the upside. That's why stocks

are flirting with all-time highs."

On a weekly basis, the S&P 500 was last essentially

unchanged while the Dow was on track to snap its streak of

Friday-to-Friday gains.

The tech-laden Nasdaq appeared set to notch its fifth

straight weekly advance.

Investors are growing increasingly resigned to the

higher-for-longer interest rate narrative after the Fed minutes

release on Wednesday, as well as cautious remarks from various

policymakers who expressed doubt whether inflation is indeed on

a reliable downward trajectory.

Financial markets are now pricing just one rate cut in 2024, a

far cry from the six cuts that were projected earlier in the

year.

On the economic front, new orders for U.S. durable goods

increased more than expected, while the University of Michigan's

final take on May consumer sentiment bumped higher, while near-

and long-term inflation expectations cooled down.

"The realization that the economy is not slowing down has pushed

back on any summer rate cut," Detrick added. "July is likely off

the table, but as (Fed Chair) Jerome Powell has said, with

improving inflation data over the summer, a September rate cut

has a fighter's chance."

The Dow Jones Industrial Average rose 48.35 points,

or 0.12%, to 39,113.61, the S&P 500 gained 36.3 points,

or 0.69%, to 5,304.14 and the Nasdaq Composite added

178.46 points, or 1.07%, to 16,914.50.

European shares closed lower and recorded a weekly decline

as sentiment was dampened by the reemergence of interest rate

worries.

The pan-European STOXX 600 index lost 0.19% and

MSCI's gauge of stocks across the globe gained

0.33%.

Emerging market stocks lost 0.71%. MSCI's broadest index of

Asia-Pacific shares outside Japan closed 0.87%

lower, while Japan's Nikkei lost 1.17%.

Treasury yields reversed and were last slightly lower after

reports confirmed the U.S. economy remains resilient, which

could convince the Fed to hold off on cutting interest rates

this year.

Benchmark 10-year notes last rose 2/32 in price

to yield 4.4669%, from 4.475% late on Thursday.

The 30-year bond last rose 4/32 in price to

yield 4.5729%, from 4.58% late on Thursday.

The dollar dipped against a basket of world currencies but

remained well-placed to resume its advance as

stronger-than-expected economic data has prompted markets to

dial back rate cut expectations.

The dollar index fell 0.38%, with the euro up

0.31% to $1.0847.

The Japanese yen weakened 0.03% versus the greenback at

156.98 per dollar, while sterling was last trading at

$1.2735, up 0.30% on the day.

Crude prices edged higher, after having been under pressure

for much of the week as the notion of prolonged restrictive Fed

policy dampened the demand outlook.

U.S. crude rose 1.11% to settle at $77.72 per

barrel, while Brent settled at $82.12 per barrel, up

0.93% on the day.

Gold prices rose but appeared set for their first weekly

downturn in three due to lowered rate cut expectations.

Spot gold added 0.3% to $2,336.03 an ounce.

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