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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The visit also took on symbolic importance as the two leaders travelled to the liberated cities of Shusha and Fuzuli, areas Azerbaijan regained after decades of occupation.
Iran's ambassador to the United Nations in Geneva said talks between the United States and Iran had made "good progress", with both sides set to establish working groups in the coming days to discuss sanctions relief and issues related to Iran's nuclear programme.
South Korea has announced it will accept North Korean prisoners of war captured by Ukrainian forces while fighting for Russia if they wish to relocate to the South, citing international law and opposition to forced repatriation.
A Ukrainian strike has damaged a school building in a Russian-controlled area of Ukraine’s Zaporizhzhia region, according to local authorities cited by the TASS news agency. No injuries were reported in the incident.
At least thirteen people have died and sixty-six have been injured following an explosion at Qatar's main liquefied natural gas (LNG) processing hub at Ras Laffan, authorities said on Sunday.
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Armenia and Azerbaijan have agreed on a landmark internet deal that will allow traffic to pass through Azerbaijani networks.It's the latest deal to highlight the ongoing peace process between the two countries.
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