In the early hours of September 28 (EST), U.S. stock markets closed mixed on Friday, though all three major indices posted gains for the third consecutive week. The Federal Reserve's favored PCE inflation data indicated easing inflation pressures and a cooling economy, bolstering market expectations for continuous rate cuts in the coming months. The Nasdaq Golden Dragon China Index surged 4%, reaching a one-year high.
The Dow Jones Industrial Average rose 137.89 points, or 0.33%, to 42,313.00 points. The Nasdaq Composite fell 70.70 points, or 0.39%, to 18,119.59 points, while the S&P 500 Index dropped 7.20 points, or 0.13%, to 5,738.17 points. For the week, the Dow gained 0.59%, the S&P 500 increased by 0.62%, and the Nasdaq rose 0.95%, marking the third consecutive week of gains for all three indices. During Friday's session, the Dow reached an intraday record high of 42,628.32 points.
On Friday, investors received the Federal Reserve's preferred inflation gauge—the August Personal Consumption Expenditures (PCE) price index. The data showed easing inflation pressures, with the PCE price index rising 0.1% month-over-month and 2.2% year-over-year, both slightly below market expectations. The core PCE price index, excluding food and energy prices, also increased by 0.1% month-over-month and 2.7% year-over-year.
Additionally, the report highlighted a 0.2% month-over-month increase in U.S. personal income in August, which was below the expected 0.4%, and a 0.1% rise in real personal consumption expenditures month-over-month.
Analysts noted that the slight rise in core inflation and household spending in August underscores a cooling U.S. economy. The report also showed a decline in the U.S. savings rate to 4.8%.
Noted financial journalist Nick Timiraos pointed out that the PCE price index rose 2.2% over the past 12 months, nearing the Federal Reserve's 2% target. The news has fueled market speculation about further rate cuts, with traders pricing a 45.9% chance of a 25-basis point rate cut and a 54.1% chance of a 50-basis point cut by November, according to the CME's FedWatch tool.
Separately, data showed the U.S. goods trade deficit narrowed to $94.3 billion in August, better than the expected $100.2 billion deficit. The August Consumer Confidence Index rose to a five-month high, indicating increasing optimism about the economy following Federal Reserve rate cuts.
Among key stocks, Nvidia (NVDA) is expected to see positive demand for its B-series GPU, with shipments likely starting in November. Tesla (TSLA) faces high absenteeism in its German plant, drawing CEO Elon Musk’s attention for investigation. Oracle (ORCL) selected AMD's (AMD) Instinct MI300X AI accelerator, marking a significant collaboration for AMD. Morgan Stanley reported that iPhone 16 sales, though initially strong, fell short of expectations, potentially leading Apple (AAPL, Financial) to adjust future orders.
Microsoft (MSFT) announced a $2.7 billion investment in Brazil for cloud and AI infrastructure. Google (GOOGL) filed a lawsuit against Microsoft in the EU, accusing it of anti-competitive practices in the cloud market. The UK's CMA decided not to further investigate Amazon's (AMZN) $4 billion investment in AI startup Anthropic. Meta (META) aims to produce AR glasses by 2027, though technical challenges could delay production.
The FDA approved Bristol-Myers Squibb's (BMY) Cobenfy drug for treating schizophrenia. Toyota's (TM) global sales fell 3.7% in August, with a notable decline in China. Chinese EV stocks like Li Auto, XPeng, NIO, and Zeekr saw gains amid positive market sentiment. JD.com's stock rose on news of mutual platform access with Alibaba.
Meanwhile, November WTI crude oil futures rose $0.51, or 0.8%, to $68.18 per barrel.
