In a stunning turnaround, Wall Street witnessed a widespread rally on Friday as stocks that had lagged behind throughout the year made a remarkable comeback, overshadowing the market's usual top performers. The S&P 500 soared 1.1%, marking its best day in seven weeks, while the Dow Jones Industrial Average surged by 654 points (1.6%). The Nasdaq composite also joined the rally, climbing 1%.

The impressive gains were propelled by positive earnings reports from several major companies, including 3M, which surpassed analysts' profit expectations. This news provided a much-needed boost to the market and helped dispel concerns that investors may have overvalued stocks related to artificial intelligence technology.

Previously overshadowed by the "Magnificent Seven" stocks, smaller stocks also experienced a surge. Nvidia, one of the members of the elite group, managed to claw back some of its losses from earlier in the week. The broader market gains were a welcome departure from the recent trend, where a divide had deepened between a handful of dominant stocks and the rest of the market.

The rally was not limited to tech behemoths and smaller stocks, as industrial companies and businesses tied to the strength of the economy also witnessed gains. Norfolk Southern, for example, saw a significant boost in its stock price after reporting better-than-expected profits for the latest quarter. The rail company's efficient operations and reduced expenses contributed to its success.

Market watchers and investors have been eagerly anticipating a broadening of gains, as a well-rounded market with multiple stocks rising is considered healthier than one dominated by just a few elites. Additionally, Friday's inflation update contributed to the positive sentiment, solidifying expectations of interest rate cuts. The Commerce Department revealed that U.S. consumer prices in June rose by 2.5% compared to the previous year, slightly lower than May's inflation rate of 2.6%.

Encouraged by the resumption of a slowdown in inflation, traders are now anticipating a 100% probability that the Federal Reserve will begin easing its interest rates in September. This, in turn, led to a 10-year Treasury yield decrease to 4.19% from 4.25% on Thursday and 4.70% in April, providing further support for stock prices.

Among the notable winners were Deckers Outdoors, which surpassed earnings expectations due to the strong performance of its Ugg and Hoka brands. The company also raised its full-year profit forecast. Newell Brands, the owner of Coleman camping supplies and Sharpie markers, experienced a staggering 40.5% surge after exceeding analysts' profit targets.

However, DexCom witnessed a significant drop of 40.7% in its stock price. The diabetes care company reported stronger-than-expected profits but disappointed with its revenue for the latest quarter and its forecast for the current quarter.

Overall, the S&P 500 closed at 5,459.10, recording a notable gain of 59.88 points. The Dow Jones Industrial Average reached 40,589.34 after rallying by 654.27 points, and the Nasdaq composite climbed 176.16 to 17,357.88.

Global stock markets also experienced positive momentum, with most stock indexes in Europe and Asia displaying gains. The Nikkei 225 in Japan, however, saw a marginal decline of 0.5% amid expectations that the Bank of Japan might raise interest rates at an upcoming policy meeting next week.

With the market recovering from a tumultuous week, investors and analysts will closely monitor upcoming trends and earnings reports to gauge the market's stability and potential for continued growth.