The S&P 500 closed higher on Friday, rising 0.19% to 6,870.40, marking its fourth straight day of gains and finishing just 0.7% below its all-time high. The Nasdaq Composite climbed 0.31% to 23,578.13, while the Dow Jones Industrial Average added 104 points, or 0.22%, to 47,954.99.
Investors cheered a softer inflation reading from the Commerce Department, which showed the core PCE price index — the Federal Reserve’s preferred inflation gauge, increasing 2.8% year over year in September, slightly below expectations. The data, delayed by the government shutdown, reinforced hopes that the Fed will cut rates by 25 basis points at its policy meeting next week.
Market odds of a December rate cut jumped to 87%, up from 62% a month ago, according to the CME FedWatch tool. “This solidifies what markets were already pricing in, near certainty of a rate cut next week,” said David Krakauer of Mercer Advisors.
The University of Michigan’s consumer sentiment survey also surprised to the upside, showing improved confidence and easing inflation expectations heading into December.
Despite optimism, some strategists cautioned that a rate cut might not trigger a major rally. “It may be a steady or choppy move, but the path for equities looks positive,” Krakauer added.
In corporate news, Netflix shares fell nearly 3% after confirming a $72 billion acquisition of Warner Bros. Discovery’s film and streaming assets, while WBD stock surged over 6%. A senior Trump administration official later said the deal was viewed with “heavy skepticism.”
For the week, the S&P 500 rose 0.3%, the Nasdaq gained nearly 1%, and the Dow added 0.5%, extending Wall Street’s steady advance ahead of the Fed’s final rate decision of 2025.
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