Dow Jones Industrial Average Hits Record Highs

Investing.com – The Dow closed at record highs on Friday, overcoming tech sector fluctuations due to rising energy stocks and easing inflation concerns.

At 4:00 p.m. ET (2000 GMT), the 30-stock Dow Jones Industrial Average gained 137 points, or 0.3%, reaching a closing record of 42,313.00. In contrast, the benchmark S&P 500 fell by 0.2%, while the tech-heavy Nasdaq Composite decreased by 0.4%.

Headline PCE Index Slows; US Consumer Spending Rises 0.2% in August

U.S. consumer spending grew at a slower-than-expected rate in August, with continued easing of inflation pressures. According to the Commerce Department’s Bureau of Economic Analysis, personal spending, which makes up more than two-thirds of economic activity, increased by 0.2% in August. This marked a slowdown from an unrevised 0.5% gain in the previous month, falling short of economists’ expectations of 0.3%. This was the slowest growth in seven months.

Household income growth also unexpectedly slowed to 0.2% from 0.3% in July, while a modest increase was anticipated at 0.4%.

Kathy Jones, chief fixed income strategist at Charles Schwab, commented on social media that both figures are “slowing but not falling off a cliff.” Despite some labor market weakening, wage gains have helped sustain consumer spending.

Meanwhile, the personal consumption expenditures (PCE) price index, a key inflation tracker for Federal Reserve officials, rose by 0.1% month-over-month, which was below estimates that it would match July’s 0.2% increase. Year-on-year, the rate slowed to 2.2%, under projections of 2.3% and 2.5% in July.

When excluding volatile items like food and fuel, the core PCE price index also slowed to 0.1% month-on-month but saw a slight uptick year-on-year to 2.7% from 2.6%.

This data follows the Fed’s decision to cut borrowing costs by 50 basis points last week, indicating more reductions could come later this year.

Oil Prices Jump, Boosting Energy Stocks Amid Rising Middle East Tensions

Energy stocks rose more than 2%, bolstered by increased oil prices amid escalating Israel-Hezbollah tensions. Israel’s intensified strikes in Beirut have diminished hopes for a ceasefire.

Costco Drops Despite Fiscal Q4 Beat; Nvidia Falls on Demand Concerns

Costco Wholesale Corp saw a decline of over 1% despite surpassing Wall Street estimates in quarterly results due to increased market share gains.

NVIDIA Corporation dropped more than 2% as reports surfaced of Beijing pressuring Chinese firms to purchase domestically produced AI chips rather than those from Nvidia, amidst steps to support the local semiconductor industry against U.S. restrictions.