Wall Street rebounded Friday, halting a three-session slide, after fresh data suggested US inflation is tracking in line with forecasts, even if it remains elevated.
The S&P 500 climbed 0.6%, snapping its losing streak, while the Dow Jones Industrial Average advanced 299 points, or 0.7%. The Nasdaq Composite gained 0.4%. All three benchmarks edged back toward record levels touched earlier in the week.
The boost came after government figures showed consumer prices, using the Federal Reserve’s preferred gauge, increased to 2.7% in August from 2.6% in July. Although still above the Fed’s 2% objective – and heavier on household budgets – the figure met analysts’ expectations.
That alignment reassured investors that the Fed may keep lowering borrowing costs to support growth. Expectations of a rate-cut cycle have fueled the market’s sharp rally since April, driving indexes to repeated highs.
However, without continued cuts, critics who argue equities are overvalued after their rapid climb could gain more traction.
The Fed lowered rates for the first time this year last week but has cautioned against committing to further reductions, warning that doing so could reignite inflationary pressures.
