The Dow jumped more than 400 points on Friday to reach an all-time high benign inflation report The way is cleared for the Federal Reserve to focus on propping up the labor market. interest rate relaxation,
In recent trading, the Dow Jones Industrial Average was up 442 points, or 1%, at 42,617. Blue-chip index hits all-time high of 42,628.32
The S&P 500, which closed at a record high on Thursday, rose 0.1%, while the Nasdaq slipped 0.2%. The three major indices are on the rise for the third consecutive week.
A report from the Commerce Department showed that consumer spending increased modestly in August, suggesting the economy maintained some of its solid momentum in the third quarter, while inflation pressures continued to ease.
“It is a relief that inflation is moving in the right direction and hopefully it will continue to move in that direction,” said Joe Saluzzi, co-head of equity trading at Themis Trading.
“It doesn't really matter whether it's 50 bps or 25 bps. The important thing is, will they continue to cut rates next year as well?”
The probability of the central bank cutting rates by 50 basis points at its November meeting was about 52.1%, compared with 50% seen before the data. According to CME Group's FedWatch tool, a reduction of 25 bps amounts to about 47.9%.
The softening of inflation toward the central bank's 2% target gave the Fed enough room to kick off a policy easing cycle with a 50 basis point rate cut last week. The focus will now turn to several labor market reports due next week.
The Russell 2000 index, which tracks small caps, outperformed with a gain of 0.7%.
Tech stocks such as Nvidia and Amazon fell 0.9% and 0.4%, respectively, and weighed on the Nasdaq.
The University of Michigan's final September estimate on consumer sentiment was 70.1, compared with the forecast of 69.3, according to a Reuters survey of economists.
Fed Governor Michelle Bowman's comments will remain in focus at the end of the day.
Late Thursday, Fed Governor Lisa Cook said the central bank's rare move earlier this month could address heightened “downside risks” to employment.
Among other stocks, Bristol-Myers Squibb rose 2.3% after the FDA approved a schizophrenia drug.
Costco Wholesale declined 2.8% after reporting a decline in fourth-quarter revenue.
US-listed shares of Chinese companies such as Alibaba rose 3.5%, PDD Holdings rose 5.8% and NetEase gained 2.8% after China's central bank lowered interest rates and injected liquidity into the banking system in its latest stimulus move. Hui.
Miners such as Arcadium rose 4.2% and US-listed shares of BHP rose 1.5% after a report showed top Chinese cities Shanghai and Shenzhen were lifting major remaining restrictions on home purchases to attract potential buyers. Making plans.
