U.S. stocks soared on Friday, following a streak of volatility, driven by better-than-expected U.S. economic data and strong corporate earnings.

Friday’s trading session kicked off on a higher note on the heels of massive up-and-down sessions after U.S. consumer sentiment in October hit its highest rate since July 2007. Stocks also jumped after earlier data revealed housing starts rose 6.3 percent in September, the Commerce Department reported. The market also turned positive after both General Electric Company and Morgan Stanley topped third-quarter earnings expectations.

“The markets are up and they’re up because of earnings. Also because we’ve reached technical levels that suggest that almost a 10 percent rally took place,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “It’s time to take your buying list out.”

Stocks also received a boost from Fed Chair Janet Yellen, who spoke on economic opportunity at the Boston Federal Reserve’s 58th Economic Conference. The market was eyeing Yellen to see whether she would make any comment on the outlook for the economy, given fear about how a slowdown in global growth is impacting the U.S. However, Yellen instead voiced concern about income inequality in the U.S., saying the extent of inequality “greatly concerns me.” Yellen's speech comes as the central bank prepares to exit its stimulus program, which is expected to end when the Federal Open Market Committee meets Oct. 28-29.

"The housing numbers came in a little bit better, but what we're seeing here is the divergence between the sectors of the housing market. We're seeing a multidwelling housing beginning to perk up, and that's due to income factors," Cardillo added. 

The Dow Jones Industrial Average jumped 203 points, or 1.26 percent, to 16,321.13; the S&P 500 Index gained 24 points, or 1.32 percent, to 1,887.67; the Nasdaq Composite added 55 points, or 1.32 percent, to 4,273.49.