Stocks closed mixed on Friday as investors continued to assess whether higher inflation measures or signs of declining inflation in July reports were more indicative of the path of interest rates.
At the close, the Dow Jones Industrial Average (^DJI) was up 0.3%, while the S&P 500 (^GSPC) lost about 0.1%. The high-tech Nasdaq Composite (^IXIC) retreated, down about 0.7% on the day.
The gauges closed slightly higher after paring larger gains earlier in Thursday’s session, but Friday’s highs offset weekly losses for the Nasdaq and S&P 500, with the Nasdaq down more than 2% in the past five days.
New producer price data provided more insight into the inflation story and the prospects for a Fed rate delay. The government said producer prices rose 0.3% in July, more than expected. However, overall levels of inflation remained well below recent peaks.
While Thursday’s CPI reading showed inflation rising again for the first time in 13 months, some see convincing signs that price pressures are easing – increasing the likelihood that the Federal Reserve will not raise interest rates at its next meeting.
But in an interview with Yahoo Finance, Mary Daly, president of the Federal Reserve Bank of San Francisco, said the Fed still had “more work to do” to calm price pressures. These upbeat statements helped cast some doubts about the inflation data, which is widely seen as positive.
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