Markets digested recent gains ahead of the long holiday weekend on Friday. While a cooler-than-expected reading on the Fed's favorite inflation gauge boosted bets for additional interest rate cuts next year, some downbeat earnings news kept overall gains in check.
At the closing bell, the blue-chip Dow Jones Industrial Average slipped less than 1% to finish at 37,385, while the broader S&P 500 rose 0.2% to 4,754. The tech-heavy Nasdaq Composite added 0.2% to finish at 14,992.
All three benchmarks posted an eighth consecutive weekly gain. The S&P 500 hasn't enjoyed a weekly winning streak this long since late 2017. It's now down less than 1% on a price basis from its record close of January 3, 2022. For the Nasdaq and the Dow, these are the longest such weekly winning streaks since the beginning of 2019.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
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.
In economic news, the Federal Reserve's preferred gauge of inflation rose only slightly in November – and is close to the central bank's target by some measures. On a core basis, which excludes volatile food and energy costs, the PCE index rose 0.1% last month vs October, and 3.2% year-over-year, the Bureau of Economic Analysis said Friday.
Economists note that on a six-month basis, core PCE increased 1.9% – or below the Fed's long-term inflation target of 2%.
"Inflation continues to surprise to the downside, with the Fed's preferred metric of core PCE rising just 0.1% month-over-month in November," notes Sonu Varghese, global macro strategist at Carson Group. "This raises the odds for a rate cut in March."
In single-stock news, Nike (NKE) stock tumbled 12% after the athletic footwear and apparel maker lowered its full-year forecast, citing a cautious consumer. Nike was by far the worst performer among all 30 Dow Jones stocks Friday.
Elsewhere, shares in Occidental Petroleum (OXY) got a lift after a regulatory filing showed that Warren Buffett's Berkshire Hathaway portfolio raised its stake in the oil giant.
Santa Claus Rally starts Friday
The Santa Claus Rally – identified in the early 1970s by the creator of the Stock Trader's Almanac – doesn't mean what a lot of folks think it means.
The Santa Claus Rally is not when stocks have a great December. If you go all the way back to the 1920s, you'll see that December is typically the seasonally strongest month of the year for stocks, anyway. Rather, the Santa Claus Rally refers to the final five trading days of the year, plus the first two trading days of the new year.
"Historically, it turns out these seven days indeed have been quite jolly," writes Ryan Detrick, chief market strategist at Carson Group. "No seven-day combo is more likely to be higher (up 79.5% of the time), and only two combos have a better average return for the S&P 500 than the 1.32% average return during the official Santa Claus Rally period."
The Santa Claus Rally period kicked off Friday with a decent gain for the S&P 500. If history is any guide, market participants should expect a happy new year, too.
Related content
- Stocks With the Highest Dividend Yields in the S&P 500
- All 30 Dow Jones Stocks Ranked
- Best Blue Chip Dividend Stocks to Buy
-
I'm want to give my 3 grandkids $5K each for Christmas.You're comfortably retired and want to give your grandkids a big Christmas check, but their parents are worried they might spend it all. We ask the pros for help.
-
If You're Not Doing Roth Conversions, You Need to Read ThisRoth conversions and other Roth strategies can be complex, but don't dismiss these tax planning tools outright. They could really work for you and your heirs.
-
Could Traditional Retirement Expectations Be Killing Us?A retirement psychologist makes the case: A fulfilling retirement begins with a blueprint for living, rather than simply the accumulation of a large nest egg.
-
AI Stocks Lead Nasdaq's 398-Point Nosedive: Stock Market TodayThe major stock market indexes do not yet reflect the bullish tendencies of sector rotation and broadening participation.
-
Dow Adds 646 Points, Hits New Highs: Stock Market TodayIt was "boom" for the Dow but "bust" for the Nasdaq following a December Fed meeting that was less hawkish than expected.
-
Dow Rises 497 Points on December Rate Cut: Stock Market TodayThe basic questions for market participants and policymakers remain the same after a widely expected Fed rate cut.
-
JPMorgan's Drop Drags on the Dow: Stock Market TodaySmall-cap stocks outperformed Tuesday on expectations that the Fed will cut interest rates on Wednesday.
-
Stocks Slip to Start Fed Week: Stock Market TodayWhile a rate cut is widely expected this week, uncertainty is building around the Fed's future plans for monetary policy.
-
Stocks Keep Climbing as Fed Meeting Nears: Stock Market TodayA stale inflation report and improving consumer sentiment did little to shift expectations for a rate cut next week.
-
Small Caps Hit a New High on Rate-Cut Hope: Stock Market TodayOdds for a December rate cut remain high after the latest batch of jobs data, which helped the Russell 2000 outperform today.
-
UNH Sparks a 408-Point Surge for the Dow: Stock Market TodayThe best available data right now confirm both a slowing employment market and a December rate cut, a tension reflected at the equity index level.
