Stocks exhibited mixed results during Friday's trading session, with major indexes closing opposite each other. The Dow Jones Industrial Average reached a new record high, while the Nasdaq and the S&P 500 experienced declines.
The Dow, although it pulled back from its session highs, ended the day up 137.89 points or 0.3% to close at 42,313.00. Conversely, the Nasdaq dropped 70.70 points or 0.4% to 18,119.59, and the S&P 500 edged down 7.20 points or 0.1% to 5,738.17.
Despite Friday's mixed performance, all three major indexes posted gains for the week. The Nasdaq rose by 1.0%, while the Dow and S&P 500 each climbed by 0.6%.
The fluctuation in stock performance followed the release of closely watched U.S. consumer price inflation data for August. The Commerce Department reported that the personal consumption expenditures (PCE) price index ticked up by 0.1% in August, matching the rise recorded in July and aligning with expectations.
Additionally, the annual growth rate of the PCE price index slowed to 2.2% in August from 2.5% in July, slightly lower than the 2.3% economists had anticipated. When excluding food and energy prices, the core PCE price index also climbed by 0.1% in August after a 0.2% rise in July. Core prices were expected to increase by another 0.2%.
The Commerce Department also reported that the annual growth rate of the core PCE price index accelerated to 2.7% in August from 2.6% in July, meeting estimates.
"The August PCE report supports the Fed's decision to act decisively on September 18," stated Quincy Krosby, Chief Global Strategist at LPL Financial. "However, the core year-over-year rate at 2.7% suggests careful consideration of another 50-basis point hike, unless the labor market indicates weakening."
She continued, "While the Fed hasn't achieved complete victory over inflation, today's report, with a year-over-year headline rate of 2.2%, demonstrates that overall inflation is trending in the right direction."
These inflation readings, which are favored by the Federal Reserve, were included in the Commerce Department's personal income and spending report.
### Sector News
Oil service stocks saw a robust rebound following sharp declines in the prior two sessions, evidenced by a 2.6% surge in the Philadelphia Oil Service Index. This rally was driven by an increase in crude oil prices.
Telecom stocks also displayed significant strength, with the NYSE Arca North American Telecom Index jumping by 2.0% to its highest closing level in over two years.
Other sectors, including oil production, natural gas, housing, and steel stocks, also performed well. In contrast, gold stocks fell sharply alongside a drop in gold prices. Semiconductor stocks faced pressure throughout the session, contributing to the Nasdaq's decline.
### Other Markets
Internationally, stock markets across the Asia-Pacific region mostly rose on Friday. Japan's Nikkei 225 Index surged by 2.3%, and Hong Kong's Hang Seng Index spiked by 3.6%.
European markets also experienced gains. The German DAX Index jumped by 1.2%, the French CAC 40 Index climbed by 0.6%, and the U.K.'s FTSE 100 Index increased by 0.4%.
In the bond market, treasuries ended the day firmly in positive territory following the inflation data, causing the yield on the benchmark ten-year note, which moves inversely to its price, to decline by 4.2 basis points to 3.749%.
### Looking Ahead
Next week's spotlight will be on the Labor Department's monthly jobs report, with additional reports on manufacturing and service sector activity also expected to attract attention.