Traders work on the floor of the New York Stock Exchange (NYSE) on Nov. 21, 2025 in New York City.
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The S&P 500 edged higher on Friday, securing its fourth straight winning day, as traders digested inflation data that could provide further incentive for the Federal Reserve to lower interest rates next week
The broad market index closed 0.19% higher at 6,870.40, putting the index about 0.7% off its intraday record. Friday also marked its ninth positive session in 10. The Nasdaq Composite increased 0.31% to settle at 23,578.13, while the Dow Jones Industrial Average climbed 104.05 points, or 0.22%, to end the day at 47,954.99.
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, gives the central bank its final inflation view before Wednesday’s interest rate vote. With inflation being mild, 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 when it announces the decision Wednesday.
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.
“I think it really just solidifies what the market’s already been pricing in, which is almost certainty of a cut for next week,” David Krakauer, vice president of portfolio management at Mercer Advisors, told CNBC. “If inflation does continue to stay somewhat relatively tame and [is] potentially decreasing, then what’s the outlook for more rate cuts into early next year?”
With expectations running high for a rate cut, Krakauer doesn’t necessarily believe that it will serve as a catalyst for stocks to move higher as the new year approaches. That said, he still thinks the market is in a healthy position for some upside, at least enough to reach new highs on the S&P 500.
“It may be a steady move, it may be a choppy move, but I certainly see the path for equities forward as being very positive,” he said.
Stocks posted gains for the week. The S&P 500 finished up 0.3% week to date, while the Nasdaq and 30-stock Dow have added almost 1% and 0.5%, respectively.
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 nearly 3% lower, while shares of WBD jumped more than 6%.
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.”
