US stocks ended the best week since Donald Trump’s election victory.

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U.S. stocks posted their best week since Donald Trump’s election victory on strong bank earnings and softening inflation, raising the prospect of further declines this year.

The blue-chip S&P 500 closed 1 percent higher on Friday, giving the index a 2.9 percent gain for the week.

Trump’s election victory marked the best weekly gain since a 4.7 percent gain on Nov. 8. The tech-heavy Nasdaq Composite rose 2.5 percent, its best weekly gain since early December.

Last week’s rally came as banks including JPMorgan Chase, Goldman Sachs and Citigroup kicked off the U.S. earnings season by reporting big increases in profits at the end of last year.

Investor sentiment benefited from figures released by the Bureau of Labor Statistics this week, which showed headline annual inflation rose to 2.9 percent in December from 2.7 percent in December. Core inflation, which controls volatile food and energy costs, unexpectedly fell to 3.2 percent from 3.3 percent a month earlier.

This week’s inflation data means sentiment has once again moved into “exciting territory,” said Mike Zygmont, co-head of trading and research at Wisdom Investment Group.

For now, he added, “no more worries about the inflation boogie man (and) good earnings and guidance from reporting banks further encouraged the bulls.”

Signs of a slowdown in inflation have boosted investors’ hopes that the US Federal Reserve’s next two-day policy meeting, which falls in late January, will slow inflation in the coming months.

The blockbuster jobs numbers released last week had some market participants calling for an end to the central bank’s easing cycle or interest rate hikes to offset the strength of inflation in the world’s largest economy.

Stocks have come under pressure in recent weeks amid a US-centric global bond selloff.

The slide stopped this week, however, with the policy-sensitive two-year Treasury yield, which closely tracks interest rate expectations, falling to 4.27 percent from Monday’s high of 4.42 percent.

The 10-year yield – a measure of international borrowing costs – fell from 4.8 percent to 4.61 percent over the same period. As prices rise, yields fall.

“Reduced risks and improved returns create a good mix to revive the weakened appetite,” said Florian Ilpo, head of macro at Lombard Audier Investment Managers.

“The trends indicating the start of the second half of January may see a reversal: lower rates lead to higher stocks,” he said.

Aditya Bhav, a strategist at Bank of America, said December’s softer inflation number could reduce the risk of a near-term rate hike. But resilient economic growth, strong consumer spending and a strong labor market mean “we maintain the view that the cycle of federal cuts is over,” he said in a note to clients.