Major U.S. stock indexes rose modestly on Friday as investors reacted to a series of economic indicators suggesting the Federal Reserve may lower interest rates this month. The data offered mixed signals about the economy’s strength, with consumer spending showing only a slight increase in September, while inflation remained above the central bank’s target. Despite the slowdown in economic momentum, the personal consumption expenditures (PCE) index stayed at 2.8% year-over-year, slightly above the Fed’s 2% goal.
A separate survey revealed that consumer sentiment improved in early December, driven by expectations of easing price pressures over the coming year. This development has heightened market speculation about a potential rate reduction during the upcoming Federal Open Market Committee meeting. According to the CME’s FedWatch Tool, traders now assign an 87.2% probability to a 25-basis-point cut this month, with another quarter-point reduction anticipated by mid-2026.
Michael Reynolds, vice president of investment strategy at Glenmede, noted that while a December cut appears likely, further aggressive easing may not follow due to ongoing concerns about labor market stability and the risk of renewed inflation.
By 11:58 a.m. ET, the Dow Jones Industrial Average had climbed 104.39 points, or 0.22%, reaching 47,955.33. The S&P 500 advanced 18.62 points (0.27%) to 6,875.74, and the Nasdaq Composite added 78.08 points (0.33%) to close at 23,583.21.
In corporate news, Warner Bros. Discovery shares increased by 2.9% after Netflix announced a $72 billion acquisition deal, concluding a prolonged bidding contest. Netflix’s own stock dipped 3%, while Paramount Skydance, another contender, saw its value fall 7.5%.
Ulta Beauty surged 14% after raising its annual sales and profit outlook, signaling strong consumer demand in the beauty sector. Meanwhile, healthcare equities declined 0.3% following a panel decision to discontinue the routine recommendation for newborn hepatitis B vaccinations.
Eight out of eleven sectors in the S&P 500 posted gains, led by communication services, which rose 1%. The small-cap Russell 2000 index gained 1% over the week but retreated 0.2% on Friday. The S&P 500 recorded 32 new 52-week highs and five lows, while the Nasdaq saw 100 new highs and 32 new lows.
On the NYSE, advancing stocks outnumbered declining ones by a ratio of 1.27 to 1, whereas on the Nasdaq, decliners edged out gainers at 1.07 to 1.
— news from Reuters
— News Original —
Wall St edges higher as economic data boosts Fed rate-cut bets
Summary n nCompanies n nIndexes up: Dow 0.22%, S&P 500 0.27%, Nasdaq 0.33% n nWarner Bros gains after Netflix agrees to buy the company n nInvestors assess inflation and consumer sentiment data n nUlta Beauty soars after raising forecasts n nDec 5 (Reuters) – Wall Street ‘s main indexes edged higher on Friday as investors digested a batch of economic data that appeared to pave the way for a Federal Reserve interest rate cut this month. n nThe first PCE print since a 43-day government shutdown froze official statistics showed that consumer spending increased marginally in September. While it broadly suggested a loss of momentum in the economy, the index was still above the Fed ‘s 2% target. n nSign up here. n nA separate report showed consumer sentiment improved in early December on expectations that price pressures would cool in the next year. n nThe releases gave markets and policymakers a fresh pulse-check on the economy ahead of what is shaping up to be one of the Fed ‘s most contentious meetings in years. n nPolicymakers will spar over whether to cut borrowing costs despite stubborn price pressures and signs that the labor market was weakening on the fringes. n nFed Funds futures now imply an 87.2% chance of a 25-basis-point rate cut at this month ‘s meeting, according to CME ‘s FedWatch Tool. Investors also expect the Fed to deliver another quarter-point rate cut by June 2026. n
“We don ‘t expect (the Fed) to cut aggressively (after December) because there are these balanced risks between the labor market,” said Michael Reynolds, vice president of investment strategy at Glenmede, adding that the danger inflation could pick up again should make policymakers more cautious. n nAt 11:58 a.m. ET, the Dow Jones Industrial Average (.DJI), opens new tab rose 104.39 points, or 0.22%, to 47,955.33, the S&P 500 (.SPX), opens new tab gained 18.62 points, or 0.27%, to 6,875.74 and the Nasdaq Composite (.IXIC), opens new tab gained 78.08 points, or 0.33%, to 23,583.21. n nIn dealmaking news, shares of Warner Bros. Discovery (WBD.O), opens new tab were up 2.9% after Netflix (NFLX.O), opens new tab agreed to buy one of Hollywood ‘s most prized, decades-old assets for $72 billion, ending a weeks-long bidding war. n nShares of the streaming giant slipped 3%, while Paramount Skydance