Markets digested recent gains ahead of the long holiday weekend on Friday. While a cooler-than-expected reading on the Fed's favorite inflation gauge boosted bets for additional interest rate cuts next year, some downbeat earnings news kept overall gains in check.
At the closing bell, the blue-chip Dow Jones Industrial Average slipped less than 1% to finish at 37,385, while the broader S&P 500 rose 0.2% to 4,754. The tech-heavy Nasdaq Composite added 0.2% to finish at 14,992.
All three benchmarks posted an eighth consecutive weekly gain. The S&P 500 hasn't enjoyed a weekly winning streak this long since late 2017. It's now down less than 1% on a price basis from its record close of January 3, 2022. For the Nasdaq and the Dow, these are the longest such weekly winning streaks since the beginning of 2019.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
In economic news, the Federal Reserve's preferred gauge of inflation rose only slightly in November – and is close to the central bank's target by some measures. On a core basis, which excludes volatile food and energy costs, the PCE index rose 0.1% last month vs October, and 3.2% year-over-year, the Bureau of Economic Analysis said Friday.
Economists note that on a six-month basis, core PCE increased 1.9% – or below the Fed's long-term inflation target of 2%.
"Inflation continues to surprise to the downside, with the Fed's preferred metric of core PCE rising just 0.1% month-over-month in November," notes Sonu Varghese, global macro strategist at Carson Group. "This raises the odds for a rate cut in March."
In single-stock news, Nike (NKE) stock tumbled 12% after the athletic footwear and apparel maker lowered its full-year forecast, citing a cautious consumer. Nike was by far the worst performer among all 30 Dow Jones stocks Friday.
Elsewhere, shares in Occidental Petroleum (OXY) got a lift after a regulatory filing showed that Warren Buffett's Berkshire Hathaway portfolio raised its stake in the oil giant.
Santa Claus Rally starts Friday
The Santa Claus Rally – identified in the early 1970s by the creator of the Stock Trader's Almanac – doesn't mean what a lot of folks think it means.
The Santa Claus Rally is not when stocks have a great December. If you go all the way back to the 1920s, you'll see that December is typically the seasonally strongest month of the year for stocks, anyway. Rather, the Santa Claus Rally refers to the final five trading days of the year, plus the first two trading days of the new year.
"Historically, it turns out these seven days indeed have been quite jolly," writes Ryan Detrick, chief market strategist at Carson Group. "No seven-day combo is more likely to be higher (up 79.5% of the time), and only two combos have a better average return for the S&P 500 than the 1.32% average return during the official Santa Claus Rally period."
The Santa Claus Rally period kicked off Friday with a decent gain for the S&P 500. If history is any guide, market participants should expect a happy new year, too.
Related content
- Stocks With the Highest Dividend Yields in the S&P 500
- All 30 Dow Jones Stocks Ranked
- Best Blue Chip Dividend Stocks to Buy
-
Want to Retire With $100K a Year? Here's How Much to SaveWhat "magic number" will be enough to generate $100K a year in retirement income? We do the math for you.
-
Rethinking Income When You Retire: No Paycheck, No ProblemWhen you retire, you'll need to adjust to the reality of depending on assets instead of a regular paycheck. For that, you'll need a new financial strategy.
-
Stock Market Today: Stocks Gain to Start the Short WeekStocks struggled for direction Tuesday, though Intel made a beeline higher on M&A buzz.
-
Stock Market Today: It's Mostly Onward and Upward for EquitiesThe major U.S. equity indexes were mixed Friday but closed an eventful week for earnings and data modestly higher.
-
Stock Market Today: Stocks Pop on Time-Delayed TariffsAll three major U.S. equity indexes rallied to intraday highs following President Trump's latest trade moves.
-
Stock Market Today: Markets Turn Lower on Nasty Inflation SurpriseEquities sold off after a hot reading on consumer price inflation pushed back rate cuts to autumn or year-end.
-
Stock Market Today: Markets Reflect Elevated UncertaintyInvestors and traders as well as CEOs and central bankers continue to adjust to a new administration in Washington, D.C.
-
Stock Market Today: Nasdaq Leads Monday With Its 190-Point GainMarket participants took a glass-half-full approach to Trump's latest tariff news.
-
Stock Market Today: Stocks Swing Lower as Inflation Fears RiseThe latest consumer sentiment data showed near-term inflation expectations rose to their highest level since November 2023.
-
Stock Market Today: Investors Respond to the Usual UncertaintyStocks surged late but the major indexes closed mixed as the search for market leadership continues.
