Stock investors are in a celebratory mood after the S&P 500 set a new high for the year on Friday and had the best month of 2023 in November, quickly erasing the benchmark index’s steep drop over the summer.

Investors have cheered signs that the Federal Reserve has finished raising interest rates, the primary tool in the central bank’s effort to slow inflation. Jerome H. Powell, the Fed chair, added to investors’ bullish mood on Friday, suggesting that the economy continues to cool as expected.

The S&P 500 nudged past the previous high for the year on Friday and has risen over 10 percent from its late October low. The rally has been broad-based and driven by large technology companies that dominate the index.

Overall, the S&P 500 has risen nearly 20 percent this year, and the rally in November has left the index just 4 percent below its highest-ever level.

The 10-year Treasury yield, one of the most important interest rates in the world, has fallen almost 0.8 percentage points since its peak in October. The decline has pulled down borrowing costs like mortgage rates and helped push stocks higher.

On Friday, the S&P 500’s rally coincided with a sharp drop in two-year Treasury yields, which are sensitive to investors’ changing interest expectations.