Stock market today: S&P 500, Nasdaq, Dow rise as Fed-favored PCE inflation data cools

The S&P 500 (^GSPC) notched a second week of gains as it stood a stone's throw away from all-time highs. Stocks have edged up for a fourth day in a row as the expectation of a Fed rate cut next week grows.

The Nasdaq Composite (^IXIC) rose 0.2%, while the Dow Jones Industrial Average (^DJI) gained nearly 0.1%, also recording a second week of gains.

S&P 500 (^GSPC) was a stone's throw away from reaching a new high on Friday, while bitcoin (BTC-USD) tumbled below $90,000 per token.

The world's largest cryptocurrency is on pace to close out the year decoupled from stocks for the first time since 2014.

Bitcoin is down roughly 3% year-to-date compared the the S&P 500's 17% gain.

while it hovers about 30% off its all-time high, north of $126,000 in October.

Gold was on pace to eke out a weekly win on Friday as investor bets on a Federal Reserve rate cut next week continued to rise.

Gold futures hovered around $4,240, on track for a less than 1% increase this week and more than $100 off its October record high.

Bitcoin (BTC-USD) tumbled below $90,000 as the world's largest cryptocurrency has failed to hold above $92,000, a key level traders have been watching.

The token is down more than 4% over the past 24 hours as it has struggled to meaningfully rebound from its October crash.

However, some Wall Street bulls still see hopes of a year-end rally as the Federal Reserve is expected to cut rates next week.

"Across price action, ETF flows, derivatives positioning, liquidity metrics, and cross-asset relationships, the data has continued to turn more constructive," Fundstrat head of digital assets Sean Farrell said in a note on Thursday night.

"Taken together, these developments point to an environment that is increasingly supportive of a rally into year-end," he added.

Nvidia (NVDA) shares fell nearly 1% Friday, lagging the Nasdaq Composite's (^IXIC) 0.4% advance as its business in China came under further pressure from US lawmakers and competition abroad.

A Chinese competitor to Nvidia, Moore Threads, surged in its market debut on Friday. Nvidia noted in its latest earnings release that greater competition from Chinese firms and geopolitical turmoil prevented its once-thriving business in the country from seeing gains in the third quarter.

Options traders were pricing in roughly 87% odds of the Federal Reserve cutting interest rates at its meeting next week following the release of the latest reading from the central bank's preferred inflation gauge.

Those odds were unchanged from earlier in the morning but slightly below yesterday's 88% chances seen for an easing, according to CME Group.

The PCE price index released Friday morning showed inflation holding steady in September. The release of the data for September had been delayed due to the government shutdown, clouding expectations for interest rate cuts.

But rate cut bets have jumped in the last several weeks ahead of the Fed's December meeting. Traders were pricing in just 62% odds of a rate cut last month.

US consumer sentiment improved in early December as inflation expectations eased.

The University of Michigan's Index of Consumer Sentiment showed a reading of 53.3 on Friday, above the 52 expected by economists polled by Bloomberg and the 51 recorded in November.

Consumers surveyed by the university believe prices will rise in the short- and long- term slightly less than they previously thought.

Year-ahead inflation expectations dipped to 4.1% from 4.5% in November, while long term inflation expectations dropped to 3.2% in December from 3.4% last month. Economists tracked by Bloomberg had expected inflation expectations to remain unchanged this month.

The brightened outlook comes after consumer sentiment deteriorated in November as Americans worried over high prices, weaker incomes, and mounting layoffs.

But the mood is still somewhat grim.

"Consumers see modest improvements from November on a few dimensions, but the overall tenor of views is broadly somber, as consumers continue to cite the burden of high prices," wrote UMichigan's director of the surveys, Joanne Hsu.

Read more here.

The Personal Consumption Expenditures (PCE) price index showed inflation holding broadly steady in September.

The index, which is the Fed's preferred inflation gauge, rose 0.3% in September from the prior month, unchanged from August's increase and in line with expectations of economists tracked by Bloomberg.

The "core" PCE price index, which excludes volatile food and energy prices, rose 0.2%, also unchanged from the previous month and in line with projections.

Friday's release from the Bureau of Economic Analysis was the first since Sept. 26, as the longest-ever government shutdown delayed the release of crucial federal economic data that factors into the Federal Reserve's policy decisions.

On an annual basis, the headline and core PCE price indexes rose 2.8% in September from the previous year, in line with economists' estimates, per Bloomberg data.

Meanwhile, personal income and personal spending rose.

Personal income climbed 0.4% in September from the prior month, above the 0.3% gain expected, but in line with the 0.4% uptick in August.

Personal spending also increased 0.3% from last month, tracking with projections, after climbing 0.6% in August.

US stocks climbed at the market open on Friday as Wall Street awaited the release of September's PCE price index at 10 a.m. ET. The reading on the Federal Reserve’s preferred inflation gauge is likely to factor into the central bank's next policy move.

The S&P 500 (^GSPC) added 0.3%, while the Nasdaq Composite (^IXIC) rose 0.4%. The Dow Jones Industrial Average (^DJI) gained nearly 0.2%.

Economic data: Personal income (September); Personal spending (September); Real personal spending (September); PCE price index (September); University of Michigan sentiment (December preliminary reading)

Earnings: Victoria's Secret (VSCO)

Here are some of the biggest stories you may have missed overnight and early this morning:

Netflix to buy Warner Bros Discovery studios for $72 billion

Is the labor market healthy? Don't count on finding out soon.

Why Nvidia's not about to lose its edge to Google

Century-old Dow Theory is flashing a bullish sign for stocks

Cloudflare says it fixed outage that slowed bankings sites, Zoom

BlackRock bitcoin ETF sheds $2.7 billion in record outflows run

AI investors are looking beyond the 'Magnificent Seven'

Arm to set up chip design facility in S. Korea

Luxury stocks look set for a stronger year after 'detox'

Victoria's Secret's (VSCO) stock rose 3% during premarket trading on Friday. The US beauty retailer is due to release its earnings before the bell today, and over the past year, its stock has fallen 5%. This quarter, analysts are expecting revenue to grow 4.3% year on year to $1.41 billion, slowing from the 6.5% increase it recorded in the same quarter last year.

The Cooper Companies Inc. (COO) stock jumped 13% before the bell on Friday. The rise followed the company's earnings report on Thursday, where they met Wall Street revenue expectations.