Relatively tame inflation data boosted the main U.S. equity indexes into Friday's opening bell, and fresh confirmation of fading consumer sentiment proved only a temporary headwind. Markets appear to be taking new tariffs on trucks, drugs and kitchen cabinets in stride into the last weekend of September.
The final trading session of the week was up, down and up again, with the Fed's preferred inflation gauge printing in line with expectations. According to the Bureau of Economic Analysis, the Personal Consumption Expenditures Price Index (PCE) rose 0.3% month over month and 2.7% year over year in August.
Core PCE, which excludes food and energy prices, was up 0.2% and 2.9%, also in line with expectations. As LPL Financial Chief Economist Jeffrey Roach notes, core PCE "showed signs of normalcy" last month.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"If businesses remain in a 'low hire – low fire' mode," Roach concludes, "the job market should remain stable enough to keep the economy out of recession." This could prove challenging for a Fed that would like to cut interest rates "without stoking greater inflation pressure."
At Friday's closing bell, the tech-heavy Nasdaq Composite had added 0.4% at 22,484, trimming its loss for the week to 0.7%. The Nasdaq remains on track to post a monthly gain for September.
The broad-based S&P 500 rose 0.6% to 6,643, stopping its three-session losing streak, finishing the week with a loss of 0.3% but staying positioned for a monthly gain too.
The blue-chip Dow Jones Industrial Average was up 0.7% at 46,247, closing higher for the first time since Monday but posting a 0.1% five-day loss. Still, the Dow is also on track for a positive September.
BA gets some lift
Boeing (BA, +3.6%) took off and was the top performer among the 30 Dow Jones stocks Friday after the Federal Aviation Administration cleared the aircraft maker to issue its own airworthiness certificates for some 737 MAX and 787 airplanes starting Monday.
"This decision follows a thorough review of Boeing's ongoing production quality and will allow our inspectors to focus additional surveillance in the production process," the FAA said. The regulator "will continue to maintain direct and rigorous oversight of Boeing's production processes."
Meanwhile Turkish Airlines agreed to purchase 75 Boeing 787 twin-aisle jets and up to 150 smaller 737 MAX single-aisle jets. Boeing also announced a new order for 30 737 MAX jets from Norwegian Group.
Morgan Stanley analyst Kristine Liwag reiterated her Equal-weight (or Hold) rating and her $235 12-month target price for BA stock in a Friday morning note, explaining that a positive shift in sentiment over the past year appeared to pause after CEO Kelly Ortberg acknowledged some production problems in mid-September.
Friday's price action suggests the resumption of a "positive shift" driven by "steadily improving 737 MAX and 787 deliveries."
COST provides more retail clues
Costco Wholesale (COST, -2.9%) highlighted an earnings calendar that remains light in terms of number of names but heavy with information about the behavior of the American consumer.
The warehouse retailer reported fiscal 2025 fourth-quarter revenue of $86.2 billion (+8.1% year over year) and earnings of $5.87 per share (+11.0% YoY), topping consensus forecasts of $86.0 billion and $5.80, respectively.
The consumer staples stock suffered in the eyes of investors because same-store sales were 5.7% vs expectations of 5.9% and down from 6.9% a year ago.
UBS analyst Michael Lasser reiterated his Buy rating and his 12-month target price of $1,205 on COST following management's report. According to Lasser, Costco is "proving that it can sustain" its core margin growth momentum" and this "alongside its effective tariff management levers should support the stock's valuation."
Consumers are concerned about inflation and jobs
Inflation remains a major source of frustration, with 44% of respondents to the University of Michigan Surveys of Consumers "spontaneously mentioning" high prices as a threat to their personal finances, the highest reading in a year.
The final read for the September surveys shows sentiment confirmed its initial print "and eased about 5% from last month," according to survey director Joanne Hsu.
Sentiment is above its April and May lows, and the decline "was relatively modest," though Hsu adds that it "was still seen across a broad swath of the population." Consumers are also concerned about the risks of a weaker labor market.
The release of the nonfarm payrolls report for September on Friday, October 3, is the highlight of next week's economic calendar.
Related content
- Best Lithium Stocks to Buy Now
- Day Trading: What Is It and Why Is It So Risky?
- When Is the Next Fed Meeting?
-
How to Choose the Best Charities to Donate ToWhile you set your giving strategy, think about your values, and select organizations that will put your contributions to good use.
-
I'm 62 and want to work a few more years, but all of this AI talk makes me feel like a dinosaur. Can't I just do my job without technology complicating things?We asked professional career coaches for advice.
-
I'm a Financial Planner: This Is Why Commitment, Not Perfection, Drives Financial SuccessMeeting your goals is more likely if you stick to your strategy despite market volatility and scary headlines. Consistency makes a difference.
-
I'm a Financial Professional: This Is Why Now Is the Time for Investors to Look AbroadExtreme U.S. market concentration has made international equities not just a diversification play, but a timely opportunity.
-
Four Ways to Make the Most of Your Benefits During Open EnrollmentOpen enrollment is a chance to make sure you're getting every ounce of value from your workplace benefits and on track to reach your long-term financial goals.
-
Stocks Retreat as Bubble Worries Ramp Up: Stock Market TodayValuation concerns took hold on Wall Street today, sending Palantir and its fellow tech stocks lower.
-
The Best Mid-Cap ETFs to BuyThe best mid-cap ETFs to buy offer efficient and diversified exposure to a universe full of highly interesting companies.
-
Tariffs, Inflation, Uncertainty, Oh My: How to Feel Less Stressed About Finances NowTariffs, high prices and an uncertain economy getting you down? These steps can help.
-
Your Estate Plan Isn't 'Done' Until You've Completed These Five Steps, From an Estate Planning AttorneyCongratulations on getting your estate plan in order. Now, you need to communicate the relevant details to ensure your plan is effectively carried out.
-
A Nightmare for Parents: How to Navigate the Legal Boundaries of Tenant Rights During a Family CrisisThis family's story illustrates how important it is to get help sooner rather than later and highlights the complexities of tenant rights and legal protections.
