Stocks rose higher on Friday as market participants rotated back into growth stocks after the S&P 500 (SPY  ) had its worst session in two months on Thursday. The broader market index rose above 5,600 again after falling below the key threshold in the previous session, while the Nasdaq Composite (QQQ  ) rose over 1% and the Dow Jones Industrial Average (DIA  ) rallied over 300 points.

Moving Markets:

Wholesale Prices rose at a more-than-expected pace in June as a rise in the price for services offset declines for goods. The producer price index (PPI) ticked 0.2% high last month, the Bureau of Labor Statistics reported Friday, bringing the headline index up 2.6% over the past year.

The hotter-than-expected inflation reading comes as market sentiment has increased following a series of data showing inflationary pressures easing across the U.S. economy. Notably, June's consumer price index (CPI) reading showed headline inflation decline month-over-month bringing the annual rate to 3%.

On the Earnings Front:

JPMorgan Chase (JPM  ) posted strong a second-quarter profit and revenue on Friday as the bank's investment banking fees rose 52% year-over-year, raking in $2.3 billion. However, CEO Jamie Dimon noted in the release that his firm is cautious amid potential future risks, including high interest rates sticking around for longer-than-expected.

"The geopolitical situation remains complex and potentially the most dangerous since World War II -- though its outcome and effect on the global economy remain unknown," Dimon said. "There has been some progress bringing inflation down, but there are still multiple inflationary forces in front of us: large fiscal deficits, infrastructure needs, restructuring of trade and remilitarization of the world."

"Therefore, inflation and interest rates may stay higher than the market expects," Dimon added.

Citigroup (CITI  ) also posted second-quarter earnings on Friday that topped Wall Street expectations for profit and revenue. Moreover, the bank's investment banking business rose 60% to $853 million, driven in part from a rebound in IPO and merger activity from last year's lull.

"Our results show the progress we are making in executing our strategy and the benefit of our diversified business model," CEO Jane Fraser said in the release. "Markets had a strong finish to the quarter leading to better performance than we had anticipated."

Wells Fargo (WFC  ) shares, however, came under pressure on Friday after the bank reported a 9% decline in net interest revenue despite its otherwise strong second quarter performance.

"We continued to see growth in our fee-based revenue offsetting an expected decline in net interest income," CEO Charlie Scharf said in the release. "The investments we have been making allowed us to take advantage of the market activity in the quarter with strong performance in investment advisory, trading, and investment banking fees."

Zoom Out:

UBS warned on Friday that Thursday's large market rotation away from Big Tech names and into small caps has the potential to continue, when looking at history.

"Historically, when the market experiences a significant one-day rotation from large to small caps, the trend tends to continue for the following four weeks," UBS strategist Patrick Palfrey wrote in a note to clients.