Stock Market Today: Stocks Keep Climbing on Interest-Rate Optimism

Investors continued to cheer Thursday's inflation update, with the Nasdaq and S&P 500 scoring their best week in months.

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Stocks continued to climb Friday, boosted by hope that Thursday's inflation data, which showed a slower-than-expected rise in consumer prices last month, could have the Fed easing back on rate hikes sooner rather than later. 

The tech-heavy Nasdaq Composite jumped 1.9% to 11,323, while the broader S&P 500 Index rose 0.9% to 3,992 – building on Thursday's impressive rally. And while the Dow Jones Industrial Average spent most of the day lower on weakness in healthcare stocks UnitedHealth (UNH (opens in new tab), -4.1%) and Merck (MRK (opens in new tab), -3.9%), a late-day burst of buying power helped the blue-chip index eke out a modest gain (+0.1% to 33,747). It was the best week for the Nasdaq (+8.1%) since March, and for the S&P 500 (+5.9%) since June.

Despite the deceleration in inflation last month, today's economic data shows prices remain uncomfortably high for consumers. The University of Michigan's consumer sentiment index fell more than expected in November, to 54.7 from October's 59.9 – erasing about half the gains the index has seen since hitting a historic low in June. Additionally, consumers' expectations for where inflation will be at this time next year rose to 5.1% from last month's reading of 5%.

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José Torres, senior economist at Interactive Brokers, says today's consumer sentiment data points to a potentially rocky road ahead. "This month's reading reflects broad weakening across all categories and implies that consumers are feeling the pain of inflation, rising interest rates and tighter credit conditions," Torres says. "Overall, this report points to a tapped-out consumer that is likely to weaken further into next year."

What Buffett's Big Move Could Mean for USB

It was a busy week of headlines on Wall Street, but one notable news story flew under the radar of all but the most devout Buffettologists. On Thursday, a regulatory filing revealed Berkshire Hathaway (BRK.B (opens in new tab)), Warren Buffett's holding company, slashed its stake in U.S. Bancorp (USB (opens in new tab)). 

Specifically, Berkshire sold 56% of its position in USB, bringing its stake in the big bank to 3.5% from 8.1%. The move shouldn't come as a major surprise given the stock's longer-term performance troubles. Besides, Buffett has been reducing exposure to financial stocks in the Berkshire Hathaway equity portfolio for some time – including selling smaller portions of his U.S. Bancorp stake in recent quarters. 

But what could this mean going forward? Read on as we take a closer look at Buffett's big move, and the impact this could have on USB stock.

Karee Venema
Contributing Editor, Kiplinger.com

With over a decade of experience writing about the stock market, Karee Venema is an investing editor and options expert at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.