Investing.com-- U.S. stocks jumped Friday, as data showing inflation continued to cool boosted hopes for a sooner interest rate cut, pushing Treasury yields lower and stoking dip-buying action in battered tech stocks.

At 14:30 ET (18:30 GMT), Dow Jones Industrial Average rose 702 points, or 1.8%, S&P 500 rose 1.3%, and NASDAQ Composite rose 1.1%. 

PCE data keeps rate cut hopes alive 

The PCE price index, the U.S. Federal Reserve's preferred inflation metric, rose 0.1% on a monthly basis in June and 2.5% annually, both as expected.

"We expect the FOMC to leave the fed funds rate unchanged next week, but for the communication to foreshadow rate cuts ahead," Macquarie said.

Treasury yields fall on rate-cut hopes, boosting dip-buying in tech   

Rate-cut optimism pushed Treasury yields lower, sparking a bid in tech stocks following their recent malaise.

The dip-buying action comes just ahead of further earnings from major tech names inclding Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) due on Tuesday and Thursday, respectively.

Microsoft's results are likely to steal the spotlight as investors look for further clues that the tech giant's cloud business Azure is capitalizing on the AI wave.  

Beyodn AI, "capex trends and the return on Microsoft’s AI investments and Office growth, specifically when Copilot uplift can offset slowing seat growth," will likely dominate investor attention, UBS said in a note.

Prints from Advanced Micro Devices (NASDAQ:AMD), Qualcomm Incorporated (NASDAQ:QCOM) and Amazon (NASDAQ:AMZN) are also due next week. 

Bristol-Myers Squibb, 3M, Deckers impress on earnings stage

On Friday, Bristol-Myers Squibb (NYSE:BMY) stock rose 11% after the drugmaker posted better-than-expected second-quarter results, driven by growth from new products like anemia treatment Reblozyl and heart drug Camzyos as well as from its top-seller, blood thinner Eliquis.

3M Company (NYSE:MMM) stock soared 7% after the industrial conglomerate raised the low end of its full-year adjusted profit forecast expecting to benefit from restructuring measures and increasing demand for electronics.

Deckers Outdoor (NYSE:DECK) stock rose 7% after the athletics shoes and apparel company raised its annual profit forecast following a first-quarter results beat.

On the flip side, DexCom (NASDAQ:DXCM) stock slumped 41% after the medical device maker cut its annual revenue forecast, saying it had fewer new customers than expected.

(Peter Nurse, Ambar Warrick contributed to this article.)