Consumer spending lifts Wall Street

U.S. stock markets ended higher on Friday, following largely in-line inflation figures, although indices recorded losses over the week.

PCE Inflation Sends Positive Signal

Brad Bernstein, Managing Director at UBS Private Wealth Management, said markets reacted positively to the Personal Consumption Expenditures (PCE) data released earlier in the day. The PCE is the Federal Reserve’s preferred measure of inflation.

Bernstein added that the main short-term risk for markets would arise if investors start to believe the Fed cannot cut rates due to improving economic data and rising inflation. “As long as inflation remains steady and employment data is mixed, rate cuts can continue, which bodes well for markets into the new year,” he noted.

Market Performance

S&P 500 rose 38.98 points (+0.59%) to 6,643.70.

Nasdaq Composite gained 99.37 points (+0.44%) to 22,482.07.

Dow Jones Industrial Average added 299.97 points (+0.65%) to 46,247.29.

Economic Context

The PCE Price Index increased by 0.3% in August, in line with economists’ expectations. Annual inflation rose to 2.7% from 2.6% in July. Strong consumer spending in August highlighted the resilience of the U.S. economy.

Trade and Tariffs

Meanwhile, shares of U.S. truck manufacturer Paccar rose, a day after President Donald Trump announced new import tariffs covering heavy-duty trucks, branded and patented pharmaceuticals, kitchen and bathroom cabinets, and upholstered furniture.

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