US stocks experienced a positive turn on Friday, ending higher following inflation data that largely met market expectations. Despite the gains on the day, all three major indexes recorded losses for the week, marking a notable shift as the S&P 500 and Nasdaq snapped three-week winning streaks.
The Commerce Department released its personal consumption expenditures (PCE) index report for August, indicating a rise in prices by 0.3 percent month-over-month and 2.7 percent year-over-year. These figures aligned with the consensus estimates and underscored the Federal Reserve’s preferred measure of inflation. Market participants are currently navigating signs of a strengthening economy while anticipating further interest rate adjustments from the Fed. Notably, the US central bank had cut rates for the first time since December, hinting at more reductions in the future.
Investors are contemplating the Fed’s next moves, especially as the end of the quarter approaches. Bruce Zaro, managing director at Granite Wealth Management in Plymouth, Massachusetts, described the situation as typical of quarter-end “window dressing.” He noted, “You’re going to have some volatility during this period and in the subsequent weeks because you have earnings coming.” The earnings season for the third quarter is set to commence around mid-October.
In specific market developments, shares of truck manufacturer Paccar rose 5.2 percent following President Donald Trump’s announcement of new import tariffs on heavy-duty trucks. This move was part of a broader tariff strategy that also impacted branded pharmaceuticals and various home goods. Eli Lilly, a pharmaceutical company, gained 1.4 percent in reaction to these developments.
Meanwhile, Electronic Arts saw a remarkable surge, with its shares jumping 14.9 percent amid reports of the videogame publisher negotiating to go private.
The Dow Jones Industrial Average increased by 299.97 points, or 0.65 percent, closing at 46,247.29. The S&P 500 rose 38.98 points, or 0.59 percent, to finish at 6,643.70, while the Nasdaq Composite gained 99.37 points, or 0.44 percent, to reach 22,484.07. Despite the day’s positive performance, all three indexes reported losses for the week: the Dow was down 0.2 percent, the S&P 500 fell 0.3 percent, and the Nasdaq dropped 0.7 percent.
Market sentiment was also influenced by comments from Federal Reserve officials. Thomas Barkin, President of the Richmond Fed, expressed his low confidence in inflation forecasts during an interview with Bloomberg Television, citing the ongoing impact of tariffs on the economy. Conversely, Fed Vice Chair Michelle Bowman emphasized the need to “act decisively and proactively” in response to recent labour market data, indicating emerging signs of fragility.
Looking ahead, investors are keenly awaiting the September US employment report, set to be released next Friday. A potential government shutdown looms as another source of uncertainty that could disrupt data releases and market stability.
In other notable market activity, Costco Wholesale shares declined 2.9 percent following the release of the company’s quarterly results. On the New York Stock Exchange, advancing issues outnumbered decliners by a ratio of 2.25-to-1. There were 205 new highs and 53 new lows recorded on the NYSE. The Nasdaq also saw a similar trend with 2,920 stocks rising against 1,729 falling, resulting in a 1.69-to-1 ratio of advancing to declining issues. Overall, US exchanges saw a trading volume of 16.98 billion shares, slightly below the 18.11 billion average over the last twenty trading days.
