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Investing.com — The S&P 500 closed slightly higher Friday to clinch its longest weekly winning streak since 2017 after data showing inflation cooled more than expected stoked bets on faster and deeper Fed rate cuts strengthening the bulls’ grip on stocks ahead of the long holiday weekend.
By 16:00 ET (21:00 GMT), the was 0.2% higher, rose 0.2%, and the was down 18 points, or 0.1%,These averages wrapped up an eighth positive week in a row – a first for the since 2017 and for the DJIA dating back to 2019.
Fed pivot party rages on as disinflation train gains steam
The , the Fed’s primary inflation gauge, for November slowed by 0.1%, taking the annualized rate through November to 2.6%, below expectations of 2.8%.
The measure that strips out volatile food and energy costs, and is more important measure of underlying inflation slowed to a 0.1%, compared with expectations for 0.2%.
Signs of faster slowdown inflation boosted expectations for a sooner rather than later rate cut, with the odds of a March cut at 85%, compared with 75% a day, according to Investing.com’s Fed Rate Monitor Tool.
Investors are now expectations 175 basis points of by the end of next year, taking the Fed funds rate to a range of 3.5% to 3.75% range. That is much more aggressive the three rate cuts for 2024 the Fed projected at its December meeting.
Nike slumps on weak revenue outlook; Tesla recalls over 120K EVs
Nike (NYSE:) cut its annual sales forecast, warning of a softer second-half revenue outlook on cautious consumer spending, sending its shares nearly 12% lower.
The sportswear giant now sees full fiscal-year revenue rising about 1%, down from its prior forecast of mid-single-digit percentage growth.
The company also detailed plans to cut up to $2 billion in costs over a three-year period, which is equivalent of 50% of Nike’s annual demand creation expense budget, RBC says, so “if redeployed effectively, could be helpful towards mid-term growth and profitability in our view.”
The lowered guidance reflecting a worse than expected consumer demand environment across markets, sent shares of peers and retailers including Foot Locker Inc (NYSE:) sharply lower.
Tesla (NASDAQ:) was slightly lower as the EV maker is set to recall over 120,000 Model S and Model X vehicles in the U.S. over the risk of cabin doors being unlocked during a crash, the country’s road safety regulator said on Friday.
Karuna Therapeutics jumps on Bristol Myers Deal; Rocket Lab flies higher after on $515M contract win
Karuna Therapeutics Inc (NASDAQ:) jumped nearly 48% after Bristol-Myers Squibb Company (NYSE:) announced a deal to buy the company for $14 billion.
Rocket Lab USA, Inc. (NASDAQ:) said its subsidiary won a contract worth $515 million from the U.S. government to produce and operate 18 space vehicles. Its shares climbed 23%.
(Peter Nurse contributed to this report.)
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