Wall Street closed higher on Friday, with the Dow Jones Industrial Average surging more than 200 points to close at another record high, as the latest U.S. economic data stoked hopes that the Federal Reserve will deliver a small interest rate cut in September.
The Dow Jones Industrial Average rose 0.6% to 41,563.08 after hitting an all-time high of 41,585.21. This was the stock's fourth record closing price this week and its 26th this year.
The S&P 500 closed close to an all-time high, up 1%, at 5,648.40 points, while the Nasdaq rose nearly 200 points, up 1.1%, marking the S&P 500's fourth consecutive month of gains.
U.S. consumer spending rose steadily in July, suggesting the economy remains strong while prices are rising modestly.
“Investors are once again seeing signs of a soft landing,” said Cameron Dawson, chief investment officer at NewEdge Wealth. “This is one of those Goldilocks reports that really threads the middle of the needle. The market is getting exactly what it wanted.”
A “just right” Goldilocks economy experiences steady growth, but not enough growth to cause excessive inflation.
Amazon and Tesla rose 3.7% and 7.8%, respectively.
Broadcom Inc. rose 3.8 percent, while chipmaker Marvell Technology Inc. jumped 9.2 percent after reporting better-than-expected quarterly results.
Friday's personal consumption expenditures report was the last major economic data release before the Fed's September meeting, after Chairman Jerome Powell last week signaled support for an imminent policy adjustment.
In money markets, traders are primarily expecting the Fed to cut rates by 25 basis points in September, according to CME Group's FedWatch tool, suggesting that a 50 basis point cut looks even less likely following Friday's data.
Friday marked the end of a tumultuous month for Wall Street, after signs of a sudden slowdown in the labor market in early August raised fears of a U.S. recession. The selloff was exacerbated by the effects of the Japanese yen carry trade.
Stocks have recovered since then, with the S&P 500 trading near all-time highs.
Trading volume was light this week ahead of the stock market's Labor Day holiday on Monday.
Nvidia rose 1.5%, rebounding from a 6.4% drop the previous day after the artificial intelligence chip pioneer failed to meet investors' sky-high expectations despite strong earnings and broadly in line with expectations.
Ulta Beauty shares fell 4 percent after the company cut its full-year earnings forecast, citing slowing demand for higher-priced makeup and fragrance products in its stores.
Intel rose 9.5% after reports it was considering options including a merger.
Dell Technologies, another AI stock, rose 4.3% after it raised its full-year sales and profit forecasts.
Shares of Trump Media & Technology Group, majority owned by former President Donald Trump, fell 1.7% to $19.50, giving it a market capitalization of $3.9 billion.
