Stocks Finish Higher as Core PCE Prices Match Expectations

Economic Indicators - The University of Michigan's US September 1-year inflation expectations were revised lower to 4.7% from 4.8%, and the 5-10 year expectations were revised down to 3.7% from 3.9% [1] - The US August core PCE price index rose by +0.2% month-over-month and +2.9% year-over-year, aligning with expectations [2] - US August personal spending increased by +0.6% month-over-month, exceeding expectations of +0.5%, marking the largest increase in five months [2] Stock Market Performance - Stock indexes closed higher on Friday, supported by reports on consumer spending and core PCE inflation, with the S&P 500 Index up +0.59%, the Dow Jones up +0.65%, and the Nasdaq 100 up +0.44% [5][6] - Rising corporate earnings expectations are a bullish backdrop for stocks, with over 22% of S&P 500 companies providing guidance for Q3 earnings that are expected to beat analysts' expectations [9] Sector Movements - Pharmaceutical stocks rose as President Trump's tariff plan on drug imports was seen as beneficial for the industry, with major drug makers increasing investments in local manufacturing [3][17] - US semiconductor makers gained support after reports of a new plan to reduce reliance on overseas chips, aiming to boost domestic manufacturing [4][15] - Energy producers rallied as WTI crude oil prices rose more than +1% to a 1.75-month high, with companies like Devon Energy and Schlumberger seeing significant gains [16] Company-Specific Developments - Electronic Arts closed up more than +14% after news of potential privatization talks, while Crinetics Pharmaceuticals surged +27% following FDA approval for a new medication [18] - Paccar's stock rose more than +5% after President Trump announced a 25% tariff on heavy trucks made outside the US [19] - Concentrix shares fell more than -13% after forecasting Q4 adjusted EPS below consensus expectations [20]