Breaking News: Dow Hits Record High as Energy Stocks Surge and Inflation Cools Faster Than Expected
The Dow closed at a record high on Friday, defying a tech slump as energy stocks soared and signs of easing inflation boosted investor confidence. At 4:00 p.m. ET, the Dow gained 137 points to reach a closing record of 42,313.00. The S&P 500 fell 0.2%, while the Nasdaq was down 0.4%.
US consumer spending grew slower than expected in August, with personal spending increasing by 0.2% compared to economists' projected 0.3% uptick. Household income growth also unexpectedly slowed to 0.2%. Despite these numbers, Kathy Jones of Charles Schwab reassured investors that the economy is not in free fall, thanks to wage gains supporting consumer spending.
Inflation pressures continued to ease, with the PCE price index rising by 0.1% monthly, below estimates. Year-on-year, the reading cooled to 2.2%. When excluding volatile items, the core PCE price index decelerated to 0.1% month-on-month but slightly accelerated to 2.7% annually.
Energy stocks surged over 2% on the back of rising oil prices due to escalating tensions in the Middle East. Israel's intensified strikes in Beirut dampened hopes for a ceasefire.
Despite Costco Wholesale Corp reporting strong quarterly results, its stock fell over 1%. NVIDIA Corporation also dropped more than 2% as Chinese companies are being pressured to buy AI chips produced domestically, impacting Nvidia's sales.
In conclusion, the market is showing resilience amidst global uncertainties, with energy stocks leading the way. Investors should keep an eye on inflation trends and geopolitical developments, as they can have a significant impact on financial markets and individual portfolios.