The Dow Jones Industrial Average closed at a new record high Friday, as market participants were encouraged by more positive inflation data. The 30-stock index rose over 130 points, while the S&P 500 Index and Nasdaq Composite dipped 0.1% and 0.4%, respectively. Despite the broader market losses, all three major averages extended gains for the third straight week.
Here's how the market settled to close out the week:
S&P 500 Index (NYSE: SPY): -0.13% or -7.20 points to 5,738.17
Dow Jones Industrial Average (NYSE: DIA): +0.33% or +137.89 points to 42,313.00
Nasdaq Composite Index (NASDAQ: QQQ): -0.39% or -70.70 points to 18,119.59
Moving Markets:
Consumer Prices dipped closer to the Federal Reserve's 2% annual target in August, the Commerce Department reported Friday, providing more evidence that future interest rate cuts may be behind the corner.
The personal consumption expenditures (PCE) price index rose 0.1% for the month, bringing the 12-month inflation rate to 2.2%, marking the lowest inflation growth since February 2021 and cooling from July's increase of 2.5%. Excluding food and energy, core PCE rose 0.1% in August and 2.7% year-over-year, coming roughly in-line with market expectations.
Consumer Sentiment rose above expectations in September to a five-month high as consumers were encouraged by easing inflation across the economy.
The University of Michigan's consumer sentiment index ticked higher to 70.1 in September from 67.9 in August. The survey showed improvement in all five of its categories, including an increase in year-ahead business expectations.
"While sentiment remains below its historical average in part due to frustration over high prices, consumers are fully aware that inflation has continued to slow," said Joanne Hsu, director of the Surveys of Consumers, in a statement. "Sentiment appears to be building some momentum as consumers' expectations for the economy brighten."
Notably, the one-year inflation outlook fell to 2.7%, marking the fourth straight month of declines.
On the Earnings Front:
Costco (NASDAQ: COST) reported mixed fiscal fourth quarter earnings late Thursday, with the wholesale retailer narrowly missing revenue expectations as its growth slowed during the quarter -- rising just 1% annually to $79.7 billion. This is the first quarter to report since Costco raised its membership fees.
Moreover, Costco's e-commerce sales rose 18.9% year-over-year, slowing from the previous quarter's pace of over 20%, while same-store sales growth was also below the previous quarter in both the U.S. (5.3%) and Canada (5.5%).
Zoom Out:
Oppenheimer Asset Management Chief Investment Strategist John Stoltzfus wrote in the firm's September outlook that the upcoming U.S. Presidential election in November is expected to preset upside and downside risks for Wall Street over the near-term.
"The Presidential election certainty looks to be a close one. We expect markets to continue to experience some upside and downside risk leading up to the election based on day to day news flow," Stoltzfus wrote. "The market is likely to show some relief that an election outcome is known after which it will seek out opportunities and risks tied to policy that could emerge post-election."