Oct. 28 (UPI) — U.S. stocks soared Friday, with the three major indexes notching gains for the week as data on consumer spending and wages suggests stubbornly high inflation may be cooling.
The Dow Jones Industrial average shot up 828.52 points, or 2.59%, to close at 32,861.8. The S&P 500 climbed 93.76 points, or 2.46%, to 3,901.06, and the Nasdaq Composite rose 309.78 points, or 2.87%, to 11,102.45.
Friday’s close added to a 5.7% weekly gain for the Dow, while the S&P 500 and Nasdaq ended the week up 3.9% and 2.2% respectively.
“Inflation data really wasn’t that bad,” Megan Horneman, chief investment officer at Verdence, said, according to CNBC. “The earnings have been not great, but not awful. When you have that middle of the road, that helps equity markets.”
The personal consumption expenditures index, a key measure of inflation, rose 0.3% in September and 6.2% compared to a year ago, slightly lower than expected. Core PCE, excluding food and energy, rose 0.5%, up 5.1% for the year, compared with a high of 5.4% in February.
The data follows a report earlier this month showing a slight decrease in the consumer price index in September to 8.2%.
The Federal Reserve is widely expected to approve another 75-basis-point rate hike at its meeting Wednesday in an ongoing effort to bring inflation down to the target 2%.
Pending home sales fell by 10.2% in September, the National Association of Realtors reported Friday, a day after the Federal Home Loan Mortgage Corp. reported that average mortgage rates climbed above 7% to their highest level in 20 years.
Friday’s surge follows mixed results Wednesday, when a report of higher-than-expected gross domestic product pushed the Dow higher, while the Nasdaq sank on disappointing earning reports in the tech sector, including from Microsoft, Alphabet and Meta.
Apple bucked the downward trend in the tech sector, with shares of the company rising 7.56% Friday after beating analysts’ estimates with earnings per share of $1.29 on $90.1 billion revenue for the quarter.
Shares of Chevron and Exxon Mobile also climbed Friday after the oil giants posted record profits.
Friday’s gains sets the markets up for a strong finish to the month.
Liz Young, head of investment strategy at SoFi, said she expects further drops this quarter.
“There are already several classic recession warning signs in place, and the risks that still lie ahead are bringing the likelihood of an actual recession closer into view,” Young said, according to Yahoo Finance.
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