NEW YORK (AP) Stock prices on the New York Stock Exchange closed another record week with little change on Friday, as hope grew on Wall Street that the U.S. economy can achieve the rare feat of suppressing high inflation. without causing a recession.
The S&P 500 index decreased 7.20 points, or 0.1%, from its all-time high set the day before its 42nd of the year to close at 5,738.17. Despite that decline, it still recorded a third week with profits and its sixth of the last seven.
For its part, the Dow Jones industrial average rose 137.89 points, or 0.3%, setting its own record and standing at 42,313.00, while the Nasdaq composite lost 70.70 points, or 0. 4%, reaching 18,119.59.
Treasury yields fell after a report showed inflation had fallen slightly more in August than economists had forecast. The numbers were similar to other inflation figures released a few weeks ago, but Friday’s report has implications because it is the measure Federal Reserve officials prefer to use.
For more than a year, the Fed kept its main interest rate at a two-decade high, hoping to slow the economy enough to bring inflation down to its 2% target. Now that inflation has dropped significantly from its level two years ago, the central bank has begun cutting rates to ease slowing labor market conditions and avoid a recession.
Of course, the risk of a recession remains. U.S. employers have reduced their hiring, and Friday’s inflation report also showed that the increase in consumer spending in August was below economists’ expectations. That’s important because consumer spending is the main driver of the economy.
Part of the difference in the numbers could be because Americans’ wages rose less in August than economists had predicted. As the Federal Reserve cuts interest rates, Americans will earn lower interest on their savings accounts and other similar assets.
The yield on the 10-year Treasury bond fell from 3.80% to 3.75%.
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