Dow ends week at record high after tame inflation report
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The news: The blue-chip Dow Jones Industrial Average closed at a record high on Friday as a subdued US inflation report lifted expectations of an outsized interest rate cut at the Federal Reserve's November policy meeting.
The numbers: Among the main indices: Dow Jones rose 0.33% to a fresh high of 42,313, the S&P 500 fell 0.13%, and Nasdaq lost 0.39%. The US personal consumption expenditures price index, the Fed's favored inflation measure, rose 0.1% in August after an unrevised 0.2% gain in July, in line with expectations.
The context: All three Wall Street indices logged their third consecutive week of gains, with markets fully pricing in a cut of at least 25 basis points at the Fed's November meeting.
Expectations for another upsized 50 basis point cut now up to 56.7% after the data, according to CME's FedWatch Tool. The data also boosted small cap stocks, with the Russell 2000 index, which tracks small caps that fare better in a low-rate environment, gained 0.67% to a one-week high.
Shares of Nvidia dropped 2.17%, weighing on the technology-heavy Nasdaq. Bristol-Myers Squibb added 1.58% after the US Food and Drug Administration approved its schizophrenia drug, while Costco Wholesale lost 1.76% after posting downbeat fourth-quarter revenue.
US-listed shares of Chinese firms such as Alibaba rose 2.15%, PDD Holdings climbed 4.67% and NetEase gained 2.65% after China's central bank lowered interest rates and injected liquidity into the banking system. The optimism extended to miners, with Arcadium gaining 2.13%, and US-listed shares of BHP also adding 1.81%.
The source: Reuters
