Traders work on the floor of the New York Stock Exchange.
New York Stock Exchange
The Dow Jones Industrial Average rose to a new record high on Friday as traders digested new data that pointed to further progress in lowering inflation. Wall Street is also on track for strong weekly gains.
The 30-stock Dow Jones Index added 392 points, or 0.9%. the Standard & Poor's 500 It rose by 0.04%, while it rose Nasdaq Composite It lost 0.3% and the gains of the technology-heavy index remained under control with a decline of more than 2%. Nvidia.
All three major indexes rose this week, with the S&P 500 up nearly 1% and the Dow Jones on track to rise 0.5%. The Nasdaq is on track for a roughly 1.5% advance week to date.
Traders received encouraging inflation data that could give the central bank more reasons to cut interest rates with more confidence. The August Personal Consumption Expenditures Price Index — the Fed's preferred measure of inflation — rose 0.1%, matching expectations of economists polled by Dow Jones. The personal consumption expenditures index rose 2.2% year-on-year, lower than expectations of 2.3%.
Policymakers and investors alike hope that monthly inflation numbers will continue to slow, allowing borrowing costs to continue to ease, which will ease pressure 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 bias toward lower interest rates,” said Chris Zaccarelli, chief investment officer at the Alliance of Independent Advisors. “With the Fed cutting interest rates — especially in the absence of recessionary growth — that represents a significant headwind for both equity and bond markets, and should ultimately provide some relief to those consumers who are more sensitive to interest rates.”
Wall Street emerges from a winning session, after a set of economic data confirmed to investors the strength of the US economy. Initial jobless claims fell more than expected in the latest week, indicating a strong labor market, while the final reading for second-quarter GDP came in at 3%.
