Stocks rose higher Friday as the Federal Reserve's preferred inflation gauge eased slightly in January, offering a bright spot in a losing week and month. The Dow Jones Industrial Average soared over 600 points, while the S&P 500 Index and Nasdaq Composite advanced about 1.6% each.
Here's how the market settled to close out the week:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Underperforming its peers, the tech-heavy Nasdaq fell over 3.5% for the week and roughly 4% for the month of February, marking its worst month since April 2024. The S&P 500 Index also fell about 1% for the week and 1.4% for the month. The Dow, meanwhile, rose 1% for the week as many investors rotated out of growth stocks amid increased trading volatility throughout the week. For the month, the Dow fell alongside the broader market, declining about 2%.
Wall Street turned negative for a brief period on Friday after talks between President Donald Trump, Ukraine President Volodymyr Zelenskyy and Vice President JD Vance turned tense before the media at the White House. The leaders had met regarding a potential Ukraine mineral rights deal with the United States, a discussion that many investors hoped would be the start of the end of the nation's war with Russia.
The Personal Consumption Expenditures Price Index increased 0.3% month-to-month in January and 2.5% annually, the Commerce Department reported Friday, coming in-line with Dow Jones consensus estimates and offering another sign that inflationary pressures are easing.
Excluding food and energy prices, core PCE rose 0.3% in January and 2.6% year-over-year, also coming in-line with estimates. Moreover, the 12-month core measure decreased compared to December's upwardly revised reading of 2.9%.
"Softer consumer spending and slower income growth should catch the Fed's attention. Despite the deceleration in the annual pace of inflation, the monthly rate is still running hotter than the Fed would like," said Jeffrey Roach, chief economist at LPL Financial, quoted by Reuters. "The odds are rising that the Fed's next rate cut will be in June. Whether the next cut happens then or in July is less relevant than the number of cuts by the end of year."
"The current macro backdrop suggests only two cuts in total this year but more in 2026," Roach added.
Elsewhere, JPMorgan economist Bennett Parrish told clients in a note that the recent increase in weekly jobless claims posted Thursday -- which matched the highest level since October -- may reflect some growing weakness in the labor market.
"While it's possible that weather and seasonal noise contributed to the spike, the sharp move higher is somewhat concerning for the jobs picture," Parrish said, referring to the 22,000 jump in claims from the previous week to a total of 242,000 for the week ended Feb. 22. "We do not think the latest increase was driven by job losses among government contractors and layoffs among federal employees are not captured by the headline figures."
