Traders work on the floor of the New York Stock Exchange (NYSE) on November 21, 2025 in New York City.
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of S&P500 It edged higher on Friday, sealing a fourth straight day of victories, as traders digested inflation data that could provide further incentive for the Federal Reserve to cut interest rates next week.
The broader market index ended 0.19% higher at 6,870.40, with the index about 0.7% below its intraday record. Friday also marked the ninth boom in 10 years. Nasdaq Composite It rose 0.31% to settle at 23,578.13. Dow Jones Industrial Average It rose 104.05 points (0.22%) to close at 47,954.99.
On Friday, markets sorted out new economic announcements. The Commerce Department said September’s Core Personal Consumption Expenditure Price Index (delayed due to the record U.S. government shutdown) showed an annualized rate of 2.8%, below the Dow Jones forecast of 2.9%. The 0.2% increase in core PCE in the same month was in line with expectations, as were the monthly and annual inflation rates in headline PCE.
Also released Friday, the University of Michigan Consumer Survey, a report that provides a glimpse into sentiment and views on short- and long-term inflation, beat expectations in December.
The PCE report serves as the Fed’s main inflation gauge and gives the Fed its final inflation outlook before Wednesday’s interest rate vote. Employment continues to be in the spotlight as inflation moderates, with recent reports showing signs of weakening in the labor market. Investors are hoping this will influence the central bank to cut interest rates by a quarter of a percentage point when it announces its decision on Wednesday.
According to the CME FedWatch tool, traders are pricing in an 87% chance of a rate cut next Wednesday, much higher than just a few weeks ago. The key federal funds futures rate is currently targeted at 3.75%-4% and is trading near the upper end of that range as short-term money market pressures continue.
“I think this really just solidifies what the market has already priced in. A rate cut next week is almost a certainty,” David Krakauer, vice president of portfolio management at Mercer Advisors, told CNBC. “If inflation remains relatively benign and potentially declining, what are the prospects for further rate cuts by early next year?”
Despite rising expectations for a rate cut, Krakauer doesn’t necessarily think it will be a catalyst for stock prices to rise as we enter the new year. That said, he still thinks the market is in a healthy position with enough upside to at least reach new S&P 500 highs.
“This may be a steady movement, or it may be a choppy movement, but the path forward for the stock market is certainly a very positive one,” he said.
Stock prices rose this week. The S&P 500 is up 0.3% week to date, while the Nasdaq and 30-stock Dow are up nearly 1% and 0.5%, respectively.
During Friday’s trading session, Netflix After initially seeing significant losses earlier in the day, the stock sawawed following the company’s announcement that it had signed a deal with warner bros discovery The company plans to acquire the company’s film and streaming assets for $72 billion, with the deal expected to close within 12 to 18 months. While Netflix’s stock price fell nearly 3%, WBD’s stock price rose more than 6%.
The streaming giant’s stock fell from its trading lows after a senior administration official told CNBC that the Trump administration views the deal with “strong skepticism.”
