Stephen Culp
NEW YORK (Reuters) – U.S. stocks posted modest gains on Friday and all three indexes posted another weekly gain as investors digested comments from Federal Reserve officials and awaited important inflation data next week.
The Dow and Dow rose slightly, while the Nasdaq was little changed. All three indexes rose for the week, with the blue-chip Dow Jones Industrial Average posting its biggest Friday-to-Friday percentage gain since mid-December.
Comments from several Fed officials helped set expectations as market participants awaited inflation data next week.
“Nobody really wants to take a big position until next week,” said Chuck Carlson, chief executive officer of Horizon Investment Services in Hammond, Indiana. “And we’re entering that time of year when people seem to sneak out early on Fridays.”
“The biggest story is the decline in consumer sentiment, but other than that there’s not much to hang our hat on,” Carlson added.
Atlanta Fed President Raphael Bostic acknowledged recent signs of a slowing economy, but added that the timing of rate cuts remains uncertain.
Striking a more hawkish tone, Dallas Fed President Laurie Logan said it was unclear whether monetary policy had been tight enough to bring inflation down to the central bank’s 2% target.
Hints of progress toward that goal will come next week when the Labor Department releases consumer price and producer price indices (CPI and PPI).
Analysts expect the key CPI report to show core prices at 3.6% annualized, which would be the steepest in three years.
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“The Fed is committed not to raising rates, but to cutting them, so the ‘higher and longer’ approach will be as bad as it gets unless things actually fall off the table,” said Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest. in Elmhurst, Illinois.
On Friday, a preliminary analysis of May consumer sentiment from the University of Michigan showed that U.S. consumer sentiment fell sharply in the month of August 2021, while short- and long-term inflation expectations increased.
The S&P 500 added 7.96 points, or 0.15%, to finish at 5,222.04, while the Nasdaq Composite lost 7.78 points, or 0.05%, to 16,338.49, according to preliminary data. The Dow Jones Industrial Average rose 122.59 points, or 0.31%, to 39,510.35.
The first quarter earnings season is coming to an end. Of the 459 S&P 500 companies that reported, 77% reported results that beat consensus, according to LSEG.
Nvidia (NASDAQ:) strengthened its position after Taiwan Semiconductor Manufacturing Co., the world’s largest chipmaker and Nvidia’s main supplier, reported a nearly 60% jump in April sales.
Novavax (NASDAQ:) shares rose following a licensing deal with a vaccine maker worth up to $1.2 billion. Sanofi (NASDAQ:).
SoundHound AI (NASDAQ:) jumped after beating first-quarter revenue estimates.