Stocks rose higher Friday to end a volatile trading month on a high note ahead of the Federal Reserve's next monetary policy decision in the coming weeks. The Dow Jones Industrial Average climbed about 230 points higher, while the S&P 500 Index and Nasdaq Composite advanced 1% and 1.1%, respectively.
Here's how the market settled to close out the week:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Moving Markets:
Personal Consumption Expenditures, which is the Federal Reserve's preferred inflation gauge, ticked higher in July ahead of the central bank's widely expected first interest rate cut in more than four years in September.
The headline index rose 0.2% on the month and 2.5% year-over-year in July, the Commerce Department reported Friday, coming in-line with expectations. Excluding volatile food and energy prices, core PCE rose 0.2% month-to-month and 2.6% from a year ago, with the annual figure coming in slightly below estimates.
Beneath the index, the department's Bureau of Economic Analysis reported personal income rose 0.3% (above estimates), while consumer spending increased 0.5% (in-line).
Consumer Sentiment rose slightly in August, the University of Michigan's Survey of Consumers showed on Friday, as expectations towards inflation ticked to their lowest level since December 2020. The survey's headline sentiment rose to a less-than-expected 67.9 in August, above July's print of 66.4 but marking a 2.2% decline from August 2023's level.
"Consumer sentiment confirmed its early-month reading; after drifting down for four months, sentiment inched up 1.5 index points above July and is currently 36% above the all-time historic low from June 2022. Consumers' short- and long-run economic outlook improved, with both figures reaching their most favorable levels since April 2024 and a particularly sizable 10% improvement for long-run expectations that was seen across age and income groups," Joanne Hsu, director of the Surveys of Consumer, said in a statement. "Sentiment this month reflects a slight rise in sentiment among Independents, as Democrats and Republicans offset each other almost perfectly."
On the Earnings Front:
Lululemon Athletica
During its earnings call with analysts, CEO Calvin McDonald commented on the lackluster Breezethrough fabric launch, seeing it's as an opportunity for the retrailer to "test and learn," as it had only ordered a small amount of product.
"While guests were excited by the fabric, the design didn't meet their expectations. Listening to our guests is central to who we are and how we grow our brand, and we took the right step of pausing on sales and look forward to reintroducing the fabric in the future," McDonald told analysts. "This decision had a negligible impact on our performance in this quarter."
Ulta Beauty
Ulta now expects full-year same-store sales to remain flat or decline by 2%, compared with its prior guidance for growth between 2% and 3%. The company also forecasts full year earnings per share between $22.60 to $23.50 on revenue of $11 billion to $11.2 billion, below its previous outlook of $25.20 to $26 and $11.5 billion to $11.6 billion, respectively.
"While we are encouraged by many positive indicators across our business, our second quarter performance did not meet our expectations, driven primarily by a decline in comparable store sales," CEO Dave Kimbell said in a release. "We are clear about the factors that adversely impacted our store performance, and we have actions underway to address the trends."
Looking Ahead:
Markets will be closed on Monday in observance of the U.S. Labor Day holiday. Trading will resume at normal hours on Tuesday, with trading sentiment expected to be impacted by August's jobs report due out on Friday. Key earnings reports slated for next week include Broadcom
