U.S. stocks ended Friday with gains, as the S&P 500 increased by 0.2%, the Nasdaq by 0.4%, and the Dow by 0.2%. This positive close was supported by a modest rise in the Personal Consumption Expenditures (PCE) and improved sentiment from the University of Michigan survey, which bolstered expectations for a Federal Reserve rate cut of 25 basis points next week. Investors are currently assessing an 87% probability of this happening. The Core PCE rose by 0.2% in September, with the annual growth rate reducing to 2.8%. The Michigan survey reflected heightened confidence and decreased short-term inflation forecasts.
Significant contributions came from large-cap technology stocks, with Alphabet increasing by 1.2%, Meta by 1.8%, and Broadcom by 2.4%. Microsoft saw a modest increase of 0.5%, while Tesla inched up by 0.1%. In contrast, Apple declined by 0.7%, and Nvidia fell by 0.5%. Netflix dropped by 2.9% following the announcement of its deal with Warner Bros Discovery, although the decline moderated due to reports of regulatory examination.
The technology sector showed broader participation as the Technology Select Sector SPDR Fund (XLK) extended its gains for the tenth consecutive session. Salesforce surged by 5.3% following strong financial results. By the week's end, the S&P 500 had climbed 0.4%, the Nasdaq rose by 0.9%, and the Dow was up by 0.5%.
