After a challenging first part of the week, the U.S. stocks bounced back on Friday. The rally came in the aftermath of new inflation data that indicated a slowdown of price increases for the past month.
The benchmark S&P 500 gained 1.09% or 63.77 points to close at 5,930.85, while the tech-heavy Nasdaq Composite closed at 19,572.60 following a 1.03% or 199.83 points jump. The blue-chip Dow Jones Industrial Average was up by 498.02 points or 1.18% for a close of 42,840.26.
Despite the rally, the major indexes failed to mitigate the losses they took earlier in the week. Dow Jones ended the week down 2.25%, while the S&P 500 and Nasdaq notched losses of 2.19% and 2.22%, respectively.
The U.S. stock market being in the red for this week was a result of a major sell-off on Wednesday amid the Federal Reserve’s decision to cut its borrowing rates by 25 basis points. This followed a projection of fewer rate cuts in 2025 compared to previous expectations. The traders previously expected at least four rate cuts next year while the officials forecast just two.
However, the market reacted positively to the latest Personal Consumption Expenditures (PCE) index release. In November, the core PCE, which excludes volatile food and energy prices, increased by 0.1%, coming below the projected 0.2% and showing deceleration from October’s 0.3% increase.