The U.S. stock market is closed Monday in observance of Memorial Day. U.S. stocks closed higher Friday, posting a solid week of gains, after Federal Reserve Chair Janet Yellen said an interest rate hike in the next few months would probably be appropriate. The major averages drifted higher to close at session highs, with financials leading all S&P 500 sectors higher. UnitedHealth and Goldman Sachs had the greatest positive impact on the Dow Jones industrial average as most constituents gained. "The important thing is she is backing up what the minutes are saying and (recent Fed speakers) have been saying," Art Hogan, chief market strategist at Wunderlich Securities, said on CNBC.

Ahead of Monday's Memorial Day holiday, stocks held solid gains for the week, which saw oil briefly top $50 and some encouraging data on the housing market, amid more Fed policymakers saying rates could rise sooner rather than later. The Dow rose 2.1 percent over the past five days for its best week since March 18. The S&P gained nearly 2.3 percent for its best week since March 4. (Tweet This) The Nasdaq composite surged 3.4 for the week, its best since February 19. The major indexes initially pared gains amid Yellen's remarks, with the Dow briefly turning lower. The U.S. dollar index extended gains and held 0.6 percent higher at levels not seen since March 29. "I was surprised she actually spoke about it. ... The only (thing) I got with what she said is it puts potentially a little uncertainty into the June 6 speech if and only if the jobs number is a little weak on the 3rd," said Jeremy Klein, chief market strategist at FBN Securities. He noted Yellen's comments were "nothing new."

Treasury yields rose, with the hitting 0.91 percent and the 10-year yield reaching 1.85 percent, still below Thursday's session highs. The Treasury cash market closed at 2 p.m. ET ahead of the Memorial Day long weekend.

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Jeffrey Gundlach, CEO of DoubleLine Capital, said Yellen is more dovish than her colleagues and her remarks Friday "doesn't suggest" a hike in June, Reuters reported.

Yellen was in conversation with Harvard professor Gregory Mankiw in early afternoon trade as she received the university's Radcliffe Medal.

Chris Piros, senior vice president and managing director, investment strategy at PNC Asset Management, said he didn't think the Fed would raise rates until at least the fall. "I just don't think there's enough momentum in the economy to withstand that," he said, noting a hike would likely "be a catalyst for a moderate sell-off." The Nasdaq composite outperformed, closing about two-thirds of a percent higher, helped by gains in shares of Alphabet, Microsoft and Baidu. Apple ended a touch lower, while the iShares Nasdaq Biotechnology ETF (IBB) gained 0.9 percent.

"I think if you look at the equity market and you look at Treasurys I think investors have upgraded their view of the economy a little bit. ... You haven't really seen that get translated into the Fed raising rates," said John Bredemus, vice president at Allianz Investment Management. He noted while expectations for a rate rise have risen, the Fed is likely "not going to do much." As of Friday's close, the Dow and S&P were within 2 percent of their 52-week intraday highs, while the Nasdaq composite was within 6 percent of its 52-week intraday high.

"I think the biggest problem we face is the uncertainty with regards to the Federal Reserve," said Robert Pavlik, chief market strategist at Boston Private Wealth. "I think you have to see more of a rebound in the domestic economy for people to feel committed enough to buy stocks and push them to new highs," he said. In a light day of economic news, the University of Michigan said consumer sentiment was 94.7 in May, below expectations but up from 89 in April.

The second revision to U.S. first-quarter GDP came in at 0.8 percent, a touch below expectations although up from the advance read. "We're still looking at a very sluggish but decent reading," said Patrick Maldari, senior fixed income investment specialist at Aberdeen Asset Management. He expects growth to pick up towards 2 percent in the second half of the year.

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While traders hope Yellen will drop monetary policy clues in her afternoon comments, expectations are for more clarity at her speech scheduled for June 6, after the release of the May jobs report. "If Yellen should indicate a rate hike is around the corner then I think we could see some profit-taking ahead of the long weekend," said Peter Cardillo, chief market economist at First Standard Financial. On Thursday, Federal Reserve Governor Jerome Powell said an interest rate could be appropriate fairly soon, while St. Louis Fed President James Bullard told reporters after a speech in Singapore that financial markets "read the (April meeting) minutes correctly." "We have not seen the trajectory of growth strong enough such that the market starts to discount the (summer) move and subsequent moves," Maldari said.

The U.S. dollar index gained about half a percent for the week for its first four-week winning streak since March 2015. The euro was last near $1.11 and the yen was near 110.4 yen against the greenback. U.S. crude oil futures settled down 15 cents, or 0.30 percent, at $49.33 a barrel after topping $50 intraday Thursday. The U.S. oil rig count showed a decline of 2 in the last week, for a drop of 330 year-over-year, Baker Hughes said.

European stocks closed mildly higher. The German DAX gained 3.7 percent for the week and the Euro STOXX Banks index gained nearly 5.7 percent, both their best weeks since mid-April. Asian stocks were mostly higher, with the Nikkei 225 up almost 0.4 percent and the Hang Seng nearly 0.9 percent higher. The Shanghai composite closed mildly lower to end the week 0.16 percent lower, for its first six-week decline since July 2012. China reported a , with 4.2 percent year-over-year growth in April versus 11.1 percent in March, the National Bureau of Statistics said Friday. Read More Early movers: BIG, VRX, GOOGL, ULTA, FEIC, GME, DECK, VZ, PANW & more

The Dow Jones industrial average closed up 44.93 points, or 0.25 percent, at 17,873.22, with Verizon leading advancers and McDonald's the greatest laggard. The Dow gained 2.13 percent for the week, with Apple the best performer and Nike the only stock falling for the week. The closed up 8.96 points, or 0.43 percent, to 2,099.06, with financials leading all 10 sectors higher. The index gained 2.28 percent for the week with tech the best performer as all sectors gained. The Nasdaq composite closed up 25 points, or 0.50 percent, to 4,926. The Nasdaq rose 3.44 percent for the week. Apple posted a weekly gain of nearly 5.4 percent. The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, declined to trade near 13.1. About two stocks advanced for every decliner on the New York Stock Exchange, with an exchange volume of 825 million and a composite volume of nearly 3.0 billion. High-frequency trading accounted for 49 percent of May's daily trading volume of about 7.04 billion shares, according to TABB Group. During the peak levels of high-frequency trading in 2009, about 61 percent of 9.8 billion of average daily shares traded were executed by high-frequency traders. Gold futures for August delivery, which had the highest trade volume according to the CME, settled down $6.00 at $1,216.70 an ounce. The June contract settled down $6.60 at $1,213.80, its lowest since late February. —Reuters contributed to this report.