NEW YORK, Sep 26 – Stocks finished Friday’s session with gains across the board, yet the overall weekly performance told a different story, with the major indexes ending lower. Investors balanced optimism from inflation figures with concerns over broader economic signals, creating a week of mixed sentiment on Wall Street.
The Dow Jones Industrial Average climbed 299.97 points, or 0.65%, closing at 46,247.29. The S&P 500 gained 0.59% to settle at 6,643.70, while the Nasdaq Composite rose 0.44%, ending the day at 22,484.07. Friday’s uptick halted a three-day losing streak for the major indexes, but despite the rebound, the overall trajectory for the week tilted downward. The S&P 500 slipped 0.3%, breaking a three-week winning run, while the Nasdaq retreated 0.7%, also ending a streak of gains. The Dow posted a modest weekly decline of 0.2%.
Driving Friday’s relief rally was the release of August’s personal consumption expenditures (PCE) price index, a key measure closely monitored by the Federal Reserve. The data revealed that core inflation, which strips out volatile food and energy components, rose at a 2.9% seasonally adjusted annual rate. This figure aligned perfectly with economists’ expectations. The broader all-items index showed an annual increase of 2.7%, alongside a monthly rise of 0.3%, both in line with forecasts.
Because the results did not deliver any unpleasant surprises, investors were reassured that inflation remains on a cooling path consistent with the Fed’s goals. Markets continued to anticipate two quarter-point rate cuts at the central bank’s upcoming meetings, a scenario that has been projected by the Fed itself. Still, optimism remained somewhat muted due to other economic signals earlier in the week.
Thursday brought encouraging job market data, showing fewer jobless claims, as well as an upward revision to second-quarter gross domestic product, which was adjusted to 3.8%. While both figures reflect economic strength, they also complicated expectations for monetary easing. A more resilient labor market, paired with faster growth, could prompt the Fed to delay or scale back rate cuts. This tug-of-war between solid economic performance and hopes for looser policy shaped much of the week’s trading mood.
David Russell, global head of market strategy at TradeStation, noted the importance of Friday’s inflation report in settling investor nerves. “After three straight days of declines in the broader market, this was enough to encourage investors to step back in,” he said. “Yesterday’s claims and GDP revision undermined the dovish narrative, but today’s PCE calms some of those worries. No news is good news.”
The University of Michigan’s September consumer sentiment survey also entered the mix, landing slightly below expectations but still close to forecasts. Interestingly, confidence levels held up well among households with larger stock portfolios, suggesting that wealthier investors remain relatively optimistic despite recent market swings.
Even so, the gains on Friday were not broad-based across all sectors. Technology stocks, particularly those tied to artificial intelligence, faced renewed skepticism. Software giant Oracle was among the notable laggards, shedding more than 8% over the course of the week. Questions surrounding the durability of the AI trade, a theme that has powered much of the market’s rally this year, weighed on investor enthusiasm for growth-oriented tech names. The sector’s weakness kept the broader market from building on its rebound in a more significant way.
Overall, the week illustrated the push and pull between encouraging economic signals and cautious market positioning. On one hand, inflation data showed no unexpected flare-ups, suggesting that the Fed remains on track to gradually ease policy. On the other, strong job numbers and higher growth underscored an economy that may not need immediate stimulus, reducing the urgency for rate cuts that investors had been counting on.
For the Dow, S&P 500, and Nasdaq, the balance tilted just enough toward caution to bring weekly declines, even as Friday ended on a positive note. The S&P 500’s break from its three-week winning streak was particularly notable, serving as a reminder that markets are still highly sensitive to incoming data.
Looking ahead, investors are expected to keep a close eye on upcoming labor reports, corporate earnings, and Fed communications for more clarity. While many traders remain hopeful that rate cuts will materialize before the end of the year, the week’s events reinforced how closely economic resilience and monetary policy expectations are linked.