S&P 500 gains for a fourth day, nears record after light inflation reading: Live updates

The S&P 500 rose on Friday, on pace for its fourth straight winning day, as traders digested inflation data that could further inform the Federal Reserve’s upcoming interest rate decision.

The broad market index traded up 0.5%, putting the index just 0.4% off its recent high. The Nasdaq Composite increased 0.7%, while the Dow Jones Industrial Average climbed 172 points, or 0.4%.

The market sorted through a fresh slate of economic releases Friday. The Commerce Department said that the core personal consumption expenditures price index for September – which was delayed due to the record-setting U.S. government shutdown – showed an annual rate of 2.8%, lower than the 2.9% Dow Jones estimate. Core PCE’s 0.2% rise on the month was in line with expectations, as were the monthly and annual inflation readings for headline PCE.

Also on Friday, the University of Michigan’s consumer survey, a report that provides a glimpse at sentiment as well as the view on inflation over the near and longer term, came in higher than expected for December.

The PCE report, which serves as the Fed’s primary inflation gauge, will give the central bank its final inflation view before Wednesday’s interest rate vote. With inflation being tame, jobs remains more in focus after recent reports showed signs of weakening in the labor market. Investors are hoping that this will influence the central bank to lower its benchmark rate by a quarter percentage point at its next meeting.

Traders are pricing in an 87% chance of a cut next Wednesday, far higher than just a couple weeks ago, according to the CME FedWatch tool. The key fed funds futures rate is currently targeted between 3.75%-4%, trading near the high end of that range amid ongoing pressures in short-term funding markets.

“Despite the likelihood of next week’s rate cut, markets will be looking to see how the Fed – and especially Fed Chair Powell – describe the outlook for next year as the future path of rate cuts is much more controversial than whether or not a single 25 bps cut this month is warranted,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management.

During Friday’s trading session, Netflix shares seesawed after initially seeing sizable losses earlier in the day following the company’s announcement that it struck a deal with Warner Bros. Discovery to buy its film and streaming assets for $72 billion — a transaction that’s expected to close in 12 to 18 months. Netflix shares were last marginally lower, while shares of WBD jumped 3%.

The streaming giant’s stock came off its lows of the session after a senior administration official told CNBC that the Trump administration views the deal with “heavy skepticism.”

In the prior day, the S&P 500 and Nasdaq closed slightly higher, with the latter seeing its eighth positive session in nine. The Dow ended the day just below the flatline.

Stocks are now tracking to post gains for the week. The S&P 500 is up 0.6% week to date, while the Nasdaq and 30-stock Dow have added 1.2% and 0.7%, respectively. Notably, small-cap stocks have been outperforming the broader market in the weekly period, with the Russell 2000 index advancing 1.3%.