Stocks Rise as Inflation Cools and Biden-Trump Debate Fallout Looms
US stocks saw a boost on Friday as the latest reading from a key inflation gauge indicated a trend of cooling inflation, while investors digested the aftermath of the Biden-Trump debate.
The S&P 500 advanced approximately 0.1%, inching closer to its record high, while the Nasdaq Composite rose 0.3% and the Dow Jones Industrial Average dipped about 0.1%.
Despite a rocky week that saw the S&P 500 and Nasdaq rebound from a three-day losing streak, the market is on track to end the first half of the year on a positive note. However, concerns about a potential pullback for the rest of the year linger.
The Federal Reserve’s preferred inflation gauge, the core Personal Consumption Expenditures (PCE) index, showed a 0.1% increase in May from the previous month, in line with expectations. This data point suggests that inflation is easing, with prices rising at their slowest pace since March 2021.
Investors also took note of President Joe Biden’s lackluster performance in the first debate against presumptive Republican nominee Donald Trump. Trump’s promised policies, including tax cuts and trade restrictions, are viewed as potentially beneficial for stocks. Shares in Trump Media & Technology Group surged in morning trading.
On the flip side, concerns about consumer resilience were raised as key companies like Nike and Walgreens reported downbeat sales prospects. Nike’s stock plummeted more than 15% in early trading, while Walgreens shares remained under pressure following a significant drop the previous day.
As the market continues to navigate through uncertainties, including the upcoming US election and economic challenges, investors are keeping a close eye on indicators like inflation and consumer behavior to gauge the future direction of stocks.
