Wall Street closed higher Friday, with all three major indexes posting weekly gains, as investors took comfort from data pointing to robust economic activity in the world's biggest economy.

A measure of business activity raced to a 31-month high in November, boosted by hopes for lower interest rates and more business-friendly policies from President-elect Donald Trump's administration next year.

The domestically focused small-cap Russell 2000 index rose and outperformed large-cap indexes. The index hit its highest in more than a week and was set for weekly advances.

Meanwhile, Alphabet fell following Thursday's 4% drop, as the U.S. Department of Justice argued to a judge the company was monopolizing online search.

AI bellwether Nvidia also slipped in choppy trading following its quarterly forecast on Wednesday.

An index tracking S&P 500 value stocks rose as investors rotated out of their growth peers.

"I’ve been looking for this leadership change to go from technology to everything else. I think we may be in the midst of that shift. Small caps are acting much better, values are acting better," said Mark Hackett, Chief of Investment Research at Nationwide.

According to preliminary data, the S&P 500 gained 19.55 points, or 0.33%, to end at 5,968.26 points, while the Nasdaq Composite gained 26.45 points, or 0.14%, to 18,998.87. The Dow Jones Industrial Average rose 423.28 points, or 0.96%, to 44,293.63.

The S&P and the Dow reached one-week highs.

Expectations on the Federal Reserve's policy move in December have recently swayed between a pause and a cut, as investors weighed the likely impact of Trump's plans on price pressures.

There is a 59.6% probability the central bank will lower borrowing costs by 25 basis points, as per the CME Group's FedWatch Tool.

Geopolitics were top of mind this week as investors monitored a missile exchange between Ukraine and Russia, after Moscow lowered its threshold for a nuclear retaliation. The markets are also awaiting Trump's Treasury Secretary pick.

"The fact that we’ve been calm on a nice, steady stair step pattern higher is very encouraging and reflective of the fact that investors aren’t acting with the emotion that they could be given the amount of uncertainties we’ve faced," Hackett said.

In company news, Gap Inc jumped after the Old Navy parent raised its annual sales forecast and said the holiday season was off to a "strong start."

Intuit fell after the TurboTax parent projected second-quarter revenue and profit below Wall Street estimates on Thursday.