NEW YORK: Wall Street stocks rallied Friday following signs of moderating inflation, finishing with weekly gains for the first time in about two months. The Dow Jones Industrial Average climbed 1.8 percent, or about 575 points, to 33,212.96, a weekly increase of 6.2 percent.
The broad-based S&P 500 gained 2.5 percent to 4,158.24, while the tech-rich Nasdaq Composite Index jumped 3.3 percent to 12,131.13. It was the first weekly gain for the Dow in eight weeks and the first for the S&P 500 and Nasdaq in seven weeks.
Friday’s gains extend a rally that began Wednesday, reversing the battering stocks have encountered most of the year as the Federal Reserve has launched aggressive steps to tighten monetary policy in response to inflation.
But Friday’s data from the Commerce Department showed the personal consumption expenditures (PCE) price index climbed 0.2 percent after several months of accelerating at more than twice that pace.
The data gives support to the argument from stock market bulls that the US economy is moving past — or has progressed from — a period of “peak inflation” — indicating there will be less grim consumer price news in the months ahead.
The figures “suggest perhaps inflation is plateauing,” said Quincy Krosby, chief equity strategist of LPL Financial. “That helps the sentiment in the market.”
“The market itself was oversold and we knew that we were overdue for a bounce,” said Krosby, who added that investors were encouraged by the $61 billion takeover of VMware by Broadcom.
Friday’s gains were broad-based, with all 30 members of the Dow advancing. The biggest jumps were: Apple, up 4.1 percent; Boeing, up 3.5 percent; and Disney, also up 3.5 percent.