US stocks rose on Friday, led by a cooler-than-expected inflation report, but closed lower for the week. The Personal Consumption Expenditure (PCE) index showed a 2.4% rise in November on an annual basis, just below the 2.5% estimate of economists polled by Reuters.
The S&P 500 and Dow Jones Industrial Average rose 1.09% and 1.18%, respectively, while the Nasdaq Composite gained 1.03%. However, each of the three major US indexes declined for the week, with the S&P 500 falling 1.99%, the Nasdaq declining 1.78%, and the Dow dropping 2.25%.
Real estate led S&P sectors higher, with a gain of 1.8% in real estate, driven by a drop in Treasury yields. Small-cap stocks also rallied, up 0.9%. Markets are monitoring the US Congress as it scrambles to avert a partial government shutdown before a midnight deadline.
Republican leaders in the US House of Representatives said they would vote on Friday to keep the federal government operating. The announcement sparked concerns about fiscal policy uncertainty and its impact on inflation. However, comments from Federal Reserve officials suggested that they are starting to factor in this uncertainty in their outlooks.
“We’ve seen this like 10 times during this Fed cycle,” said Jay Hatfield, CEO at Infrastructure Capital Advisors in New York. “The market just always overreacts on one side or the other.”
Source: https://www.reuters.com/markets/us/futures-hit-by-government-shutdown-fears-ahead-inflation-data-2024-12-20