NEW YORK, Dec. 20 (Xinhua) -- U.S. stocks ended higher on Friday, after fresh inflation data provided a welcome surprise to investors.
The Dow Jones Industrial Average reversed from earlier losses and rose 498.02 points, or 1.18 percent, to 42,840.26. The S&P 500 added 63.77 points, or 1.09 percent, to 5,930.85. The Nasdaq Composite Index increased 199.83 points, or 1.03 percent, to 19,572.6.
All of the 11 primary S&P 500 sectors ended in green, with real estate and technology leading the gainers by adding 1.82 percent and 1.53 percent, respectively. Consumer staples posted the weakest growth, up by 0.12 percent.
The personal consumption expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, rose 2.4 percent year over year in November, slightly below economists' expectations. The modest increase in inflation helped alleviate concerns sparked earlier this week when the Fed signaled a more cautious approach to future rate cuts due to persistent inflationary pressures.
Adding to the optimism, Chicago Fed President Austan Goolsbee expressed encouragement over the latest inflation figures, suggesting that rate cuts could still be on the table for 2025, despite the central bank's tempered stance. "We're still on path to get to 2 percent and at least for this new month you don't want to make too much out of any one month, but I'm hopeful that this suggests that the couple of months of firming were more of a bump than a change in path," he said.
Investor sentiment steadied Friday following a week of heightened volatility, with Tom Fitzpatrick, managing director at R.J. O'Brien and Associates, noting the calming effect of the day's trading, "today has calmed people down."
Markets will observe shortened trading hours ahead of the Christmas holiday, closing early on Tuesday and remaining closed on Wednesday. Trading will resume on Thursday.
Investors hoping for a traditional "Santa Claus rally" may face a quieter week on the economic front, with only a handful of data releases. However, the focus could shift to political developments in Washington, which are expected to deliver high-stakes drama that may impact market sentiment. ■
