US stocks end higher to snap 4-month winning streak as soft landing hopes rise

• US stocks rose on Friday, with the Dow Jones Industrial Average closing at a record high for a second day in a row.

• The S&P 500 and Dow snapped a four-month winning streak in August amid renewed hopes for a soft landing.

• Investors are anticipating a Fed rate cut next month after PCE inflation data met expectations.

US stocks traded higher on Friday, with the Dow Jones Industrial Average closing at a record high for the second day in a row and the fourth day this week.

The S&P 500 and Dow ended August with their fourth consecutive monthly gain as hopes that the US economy can avoid a recession were renewed during the month after a brief spasm of volatility spurred by a weak July jobs report.

Investors were further comforted by Friday’s fresh inflation data, with the personal consumption expenditure index rising 0.2% and 2.5% monthly and annually, respectively, in line with economists’ estimates.

Investors saw the inflation data as bolstering the Federal Reserve’s expected rate cut at its Sept. 18 policy meeting.

“Optimism about the Fed’s upcoming easing cycle is rising after this morning’s PCE data and Consumer Sentiment report reflected downward price pressures and revised downward inflation expectations,” said Interactive Brokers economist José Torres.

Looking ahead to next week, investors will be eagerly anticipating the August jobs report due out on Friday, September 6.

If the report shows any weakness in the labor market, it could lead the Fed to implement a 50 basis point interest rate cut next month instead of the expected 25 basis point cut.

Economists expect the U.S. economy added 162,000 jobs in August, which should push the unemployment rate down to 4.2 percent from 4.3 percent.

Here’s where US indices stood at the closing bell at 4pm on Friday:

Here’s what else is going on:

The story continues

In commodities, bonds and crypto:

• West Texas Intermediate crude fell 3.32% to $73.39 a barrel. Brent crude, the international benchmark, fell 2.61 percent to $76.76 a barrel.

• Gold fell 1.03% to $2,533.90 an ounce.

• The 10-year Treasury yield rose five basis points to 3.917%.

• Bitcoin fell 0.86% to $58,861.

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