The US stock market recorded an 8th consecutive weekly win as the major indices made slight gains following cooler-than-expected inflation data. The benchmark S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) advanced about 0.2% on Friday, while the Dow Jones Industrial Average (^DJI) slipped just under the flatline, falling less than 0.1%. The weekly gains were primarily attributed to data released by the Federal Reserve, showing a slowdown in inflation through November, with the personal consumption expenditures report revealing a 0.1% decrease in the inflation rate to 2.6%, below the anticipated 2.8%.
Investors welcomed the news of cooled inflation, as it stoked bets on faster and deeper rate cuts by the Fed, thereby strengthening the bulls’ grip on stocks ahead of the long holiday weekend. By 16:00 ET (21:00 GMT) on Friday, the S&P 500 Futures was 0.2% higher, Nasdaq 100 Futures rose 0.2%, and the Dow was down 18 points, or 0.1%. These averages wrapped up an eighth positive week in a row, marking the S&P 500’s longest weekly winning streak since 2017 and the DJIA’s since 2019.
The weeks gains were significant, as they came after the release of the Federal Reserve’s preferred inflation reading, indicating that pricing pressures continued to cool in November and are approaching the Feds 2% target. For the entire week, the Nasdaq gained 1.2%, the S&P 500 rose 0.75%, and the Dow rose a more modest 0.2%. Wall Street looked to extend its year-end rally as the positive momentum was set to continue.
The optimism in the stock market was further buoyed by bets on faster and deeper Fed rate cuts due to the cooling inflation, as well as the prospects of a strong holiday shopping season, prompting investors to maintain their bullish stance. The positive market sentiment was evident with the S&P 500 Futures and Nasdaq 100 Futures both rising 0.2% by 16:00 ET (21:00 GMT) on Friday.
As the stock market prepared to close for the long holiday weekend, the positive momentum underpinned by the cooler inflation data signaled a robust end to the trading week, hinting at a potentially strong start to the year-end rally for Wall Street.
In conclusion, the US stock market’s 8th consecutive weekly win was propelled by cooler inflation data, which fueled investor optimism and strengthened the bulls’ grip on stocks. This positive momentum is indicative of a potentially strong year-end rally for Wall Street, setting the stage for an optimistic close to the trading year.
