Traders work on the floor of the New York Stock Exchange.
NYSE
Stocks rose Friday as traders digested new data that pointed to further progress in lowering inflation. Wall Street was also headed for solid weekly gains.
The S&P 500 gained 0.2%, while the Nasdaq Composite hovered near the flatline. The technology-heavy index’s gains were kept in check by a more than 2% decline in Nvidia. The Dow Jones Industrial Average outperformed, rising 322 points, or 0.7%.
The three major indexes are higher for the week, with the S&P 500 up nearly 1% and the Dow on pace to rise 0.5%. The Nasdaq is on track for a roughly 1.5% week-to-date advance.
Traders also received encouraging inflation data that could give the central bank more reason to confidently cut interest rates further. August’s personal consumption expenditures price index — the Federal Reserve’s favored measure of inflation — increased 0.1%, matching expectations from economists polled by Dow Jones. PCE increased 2.2% at an annualized pace, below the 2.3% forecast.
Policymakers and Wall Street alike are hoping for persistent cooling in monthly inflation figures, allowing for continued easing of borrowing costs that will ease the strain on corporate and household balance sheets.
“To the extent that inflation remains under control – and we continue to trend in that direction – the Fed can focus almost entirely on the labor market, which means a rate cutting bias,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. “As the Fed cuts rates – especially in the absence of recessionary growth – it is a great tailwind for both stock and bond markets and should eventually provide some relief for those consumers that are more interest-rate sensitive.”
Wall Street is coming off a winning session, after a batch of economic data assured investors of the strength of the U.S. economy. Initial jobless claims fell more than expected in the latest week, indicating a strong labor market, while the final reading of second-quarter gross domestic product came in at a robust 3%.