Stocks rose on Friday, with both the S&P 500 and Nasdaq closing at a fresh record high, as Federal Reserve Chairman Jerome Powell prepared Wall Street for the central bank to start tapering its pandemic-era economic stimulus by the end of the year.
All three major stock averages finished the week in positive territory, with the Nasdaq outperforming with a 2.8% gain, while the S&P 500 added 1.5% and the Dow Jones Industrial Average climbing by 0.9%.
Here's how the market settled to close out the week:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Fed Chair Powell signals the central bank will start tapering its pandemic stimulus this year:
Fed Chair Jerome Powell said during his speech at the Jackson Hole Symposium on Friday that while the economy and labor market have increased their recovery pace, there are still some economic risks surrounding the ongoing spread of the Delta variant.
Overall, Powell said that the economy is making progress toward the central bank's dual goals of reaching maximum employment and price stability within the U.S. economy, which signals that "it could be appropriate to start reducing the pace of asset purchases this year."
Additionally, Powell maintained his previous view that current elevated levels of inflation will ultimately be transitory, with Powell specifying that wage increases were unlikely to produce a sustained increase in inflation.
"Businesses and consumers widely report upward pressure on prices and wages. Inflation at these levels is, of course, a cause for concern," Powell said in prepared remarks. "But that concern is tempered by a number of factors that suggest that these elevated readings are likely to prove temporary."
Personal income rose at fastest rate in four months in July:
U.S. personal income rose at the fastest rate in four months in July, according to the Bureau of Economic Analysis report published Friday, reflecting increasing economic activity as the economy works towards pandemic recovery.
Income increased by 1.1% in June over June, posting a stronger rise than the 0.3% expected and accelerating from June's 0.2% pace. Personal spending, meanwhile, slowed to 0.3% in July, decelerating from June's 1.1% advance. The personal savings rate also increased in July over June, climbing to 9.6% from last month's 9.4%.
Here's how benchmarks started trading soon after opening bell:
S&P 500 Index: +0.26% or +11.75 points to 4,481.75
Dow Jones Industrial Average: +0.19% or +65.17 points to 35,278.29
Nasdaq Composite Index: +0.24% or +37.03 points to 14,981.56
