Stocks rose mostly higher on Friday as another cooler-than-expected inflation report continued to boost optimism towards multiple upcoming Federal Reserve interest rate cuts for 2024. The Dow Jones Industrial Average settled at a negative flatline, while the S&P 500 Index and Nasdaq Composite gained 0.17% and 0.19%, respectively.
Here's how the market settled to close out the week:
S&P 500 Index (NYSE: SPY): +0.17% or +7.88 points to 4,754.63
Dow Jones Industrial Average (NYSE: DIA): -0.05% or -18.38 points to 37,385.97
Nasdaq Composite Index (NASDAQ: QQQ): +0.19% or +29.11 points to 14,992.97
In the spotlight, the Federal Reserve's preferred inflation gauge came mostly in-line with expectations, signalling that price pressures are continuing to ease closer towards the central bank's goal of 2%. The core personal consumption expenditures (PCE) index, which excludes prices for food and energy, rose 0.1% month-over-month in November and 3.2% annually, the Commerce Department reported on Friday.
Elsewhere, headline PCE fell 0.1% on the month and rose 2.6% year-over-year in November, marking the first monthly decline since April 2020. Moreover, core PCE rose 1.9% on a six-month basis, meaning that the Fed may have met its 2% goal if inflation trends continue.
In other economic news, sales of new homes in the United States rose to a seasonally adjusted annual rate of 590,000, according to data from the U.S. Census Bureau released on Friday. That estimate is 12.2% lower than October's revised rate of 672,000, but 1.4% above late November's estimate of 582,000. Beneath the headline, the median sales price for new homes was $434,700 for the month, with the average being $488,900.
On the earnings front, Nike (NYSE: NKE) shares came under pressure on Friday after the apparel company reported weaker-than-expected sales for its fiscal second quarter and issued disappoint revenue outlook for the second half of the year. Moreover, Nike said it plans to cut costs by about $2 billion over the next three years.
"Last quarter as I provided guidance, I highlighted a number of risks in our operating environment, including the effects of a stronger U.S. dollar on foreign currency translation, consumer demand over the holiday season and our second half wholesale order books. Looking forward, the impact of these risks is becoming clearer," said CFO Matthew Friend during an earnings call with analysts, quoted by CNBC. Friend added that the new outlook "reflects increased macro headwinds, particularly in Greater China and EMEA."
In single-stock news, Bristol Myers Squibb (NYSE: BMY) announced Friday that it has agreed to purchase Karuna Therapeutics (NASDAQ: KRTX) for $14 billion, notably brining the experimental schizophrenia drug KarXT into its portfolio.
"There are tremendous opportunities in neuroscience, and Karuna strengthens our position and accelerates the expansion and diversification of our portfolio in the space," said Bristol Myers Squibb CEO Christopher Boerner in a statement. "We expect KarXT to enhance our growth through the late 2020s and into the next decade."
Looking ahead, market participants are looking to benefit from the so-called Santa Claus rally, or a marked period of end-of-the-year strength for Wall Street. The stock market will be closed on Monday for the Christmas holiday, and will resume normal trading hours on Tuesday.