S&P 500 rises on encouraging inflation, consumer data as benchmark wraps up huge first half: Live updates

He S&P 500 Index rose on Friday as traders digested New data from the personal consumption expenditure price index That indicated a slowdown in inflation, as well as better-than-expected consumer confidence data. They're also counting down to the end of what has been a strong first half of the year.

The broad market index gained 0.7%, while the Nasdaq Composite Index advanced by 0.9%. The Dow Jones Industrial Average added 228 points, or 0.6%.

Inflation in May slowed to its lowest annual rate in more than three years, the Commerce Department reported Friday. The core PCE, which excludes the more volatile food and energy prices, rose just 0.1% last month and 2.6% from a year earlier. Both estimates were in line with the Dow Jones consensus estimates. The core PCE index is the Federal Reserve’s preferred measure of inflation. The headline PCE, which includes food and energy, was flat for the month and also rose 2.6% on an annual basis, also in line with expectations.

"From a market perspective, today's PCE report was almost perfect," said David Donabedian, chief investment officer at CIBC Private Wealth US. "This was unequivocally a positive report."

The consumer confidence index for June was also higher than expected, rising to 68.2 from 65.6 at the beginning of the month.

Market participants have been placing the inflation statistics at the forefront of their minds as they try to guess when the Federal Reserve will begin cutting interest rates. Traders are currently pricing in a 59.5% chance that the central bank will cut rates at its September meeting, according to the CME Group's FedWatch tool.

The market officially concludes the first six months of 2024 with the close on Friday.

The tech-heavy Nasdaq has led the way during the first half, rising about 20% as the artificial intelligence craze captured investors' enthusiasm. The broad S&P 500 is up more than 15%, while the blue-chip Dow has lagged behind with a gain of just 4.5%. NVIDIA Shares rose 2.5% on Friday.

“AI has dominated all year and driven concentration in the broader market,” said Mike Dickson, director of quantitative research and strategies at Horizon Investments. “That has resulted in a really strong year.”

Part of the reason for the Dow's underperformance stems from an idiosyncratic pullback in the second quarter. The Dow has fallen more than 1% over the period, while the S&P 500 and Nasdaq have added more than 4% and 9%, respectively, over the same period.

All three have gained ground in June. The Nasdaq again led the way with a month-to-date gain of more than 6%. The S&P 500 and the Dow gained more than 4% and 1%, respectively.

This week alone, the Nasdaq has advanced 1%. The S&P 500 is up about 0.6%, while the Dow Jones gained 0.5%.

Nike Shares fell more than 17% after the sports retailer cut its forecast for the full year. Shoe box Shares fell 5.7% in sympathy.