The S&P 500, which tracks the performance of the 500 largest companies listed on U.S. exchanges, notched its best week since November 2020, more than erasing all of the losses it incurred since the start of the war.

In an impressive showing this week, stocks also brushed off a Fed interest rate hike–and multiple calls by Fed officials for an even faster pace of rate hikes in the future. 

The Dow Jones Industrial Average closed Friday up 0.8%, at 34,754, while the S&P 500 rose 1.2% to 4,463, and the tech-heavy Nasdaq jumped 2% to 13,893.

Market leaders on the day included tech companies like cloud-based software company Salesforce, up 4%, and the chip-maker Nvidia, up 6.8%.

Moderna also jumped over 6% to nearly $179 per share on Friday, after receiving a boost from a new CDC study that showed three of its COVID-19 vaccine shots were 94% effective against death or use of a ventilator as a consequence of the Omicron variant.

Why are stocks up?

With historic geopolitical tensions, rising interest rates, and a 7.9% annual inflation rate creating an uncertain backdrop for markets, many investors have been left wondering why stocks are rising.

Deutsche Bank’s multi-asset research strategist Jim Reid said that stocks’ rise is to be expected given the “historical playbook” seen during periods when the Fed raises rates.

Reid described in a note to clients on Friday how over the last 70 years of so-called “hiking cycles,” during which the Fed increases interest rates, the S&P 500 has only fallen one out of 13 times in the first nine months after the first hike.

Mark Mobius, a veteran investor and the founder of the asset management firm Mobius Capital Partners, said he believes investors are doing what they need to do to protect themselves against inflation–buying stocks–and that’s only pushed the market up further.

“[Anybody] who wants to protect themselves against this inflation must hold stocks. They must hold companies that are able to adjust their prices to inflation,” Mobius said in an interview with CNBC.

The end of the tech rout?

Wedbush tech analyst Dan Ives said the “Nightmare on Elm Street for tech investors” ended this week after uncertainty surrounding Fed actions was removed. 

“The fears of the Street starting in December were all around what the Fed was going to do, so once Powell ripped the Band-Aid off and gave the interest rate path for the year ahead, it put in the bottom for the year for tech,” Ives told Fortune.

“There’s still a complex geopolitical environment, but tech stocks relative to value and growth are the most oversold we’ve seen since 2015,” he added.

Reason to be cautious?

While stock investors rejoice over recent gains, some Wall Street titans and veteran economists warn the U.S. economy’s future might not be so bright.

Jeff Gundlach, CEO of the money management firm DoubleLine Capital, told CNBC late Wednesday that he believes “stagflation” is set to hit the U.S. economy and that “the market will roll over once the Fed raises rates a couple more times.” He said the Fed must ensure a “soft landing” for the U.S. economy through slow and steady rate hikes.

Larry Summers, president emeritus of Harvard University and former head of President Barack Obama’s National Economic Council, also warned of stagflation, but he instead called on the Fed to rapidly increase interest rates to cool inflation, in a Washington Post Op-Ed

“I believe the Fed has not internalized the magnitude of its errors over the past year, is operating with an inappropriate and dangerous framework, and needs to take far stronger action to support price stability,” Summers wrote.