Dow Sets Record As Wall Street Wraps Another Winning Week

U.S. stocks closed out another record-setting week with a subdued performance on Friday, as optimism grew on Wall Street that the U.S. economy could achieve the rare feat of curbing high inflation without triggering a recession, according to a report by Stan Choe, Matt Ott, and Zimo Zhong for the Associated Press (AP).

The Dow Jones Industrial Average gained 137 points, or 0.3%, reaching a new record.

The S&P 500 edged down by 0.1% from its all-time high set the previous day, marking its 42nd record high of the year.

Meanwhile, the Dow Jones Industrial Average gained 137 points, or 0.3%, reaching a new record, while the Nasdaq composite slipped by 0.4%. Treasury yields eased in the bond market after a report showed that inflation in August slowed slightly more than economists had anticipated.

This mirrored similar reports on inflation earlier in the month, but Friday’s data held particular weight as it reflects the measure preferred by Federal Reserve officials.

For over a year, the Federal Reserve maintained its main interest rate at a two-decade high in an effort to cool the economy and bring inflation closer to its 2% target. With inflation now significantly lower than its peak two summers ago, the Fed has started to cut rates to ease conditions for a slowing job market and avoid a recession.

However, the risk of an economic downturn still remains. U.S. employers have slowed hiring, and the inflation report also showed that U.S. consumer spending growth in August fell short of economists' expectations.

This is significant because consumer spending is the primary driver of the U.S. economy.