The Dow Jones Industrial Average and other major stock indexes closed higher but off session highs Friday after a soft inflation report provided a bullish backdrop, while efforts continued to avert a partial government shutdown.
The Dow industrials added nearly 500 points, or 1.2%. The S&P 500 climbed 1.1% and the Nasdaq composite gained 1% but had been up as much as 2%.
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Volume on the New York Stock Exchange and on the Nasdaq rose. Friday is a “triple witching” day of options expirations.
Advancing stocks outnumbered decliners by more than 7-to-2 on the NYSE and by about 11-to-5 on the Nasdaq, according to FactSet. All 11 S&P 500 sector indexes finished higher, the first time that’s happened since Nov. 5.
The small-cap benchmark Russell 2000 rebounded 0.9% but had been up as much as 1.9%. The Innovator IBD 50 (FFTY) exchange traded fund outperformed, gaining 2%, although it too pared gains.
Lemonade (LMND), Palantir (PLTR) and Rocket Lab (RKLB) were the biggest gainers, up about 7% to 9%.
Treasury yields surged this week, but on Friday the yield on the benchmark 10-year note fell five basis points to 4.51% after the inflation report surfaced.
On Thursday, a government spending bill backed by President-elect Donald Trump failed to pass the House. Now, a partial government shutdown looms, unless lawmakers pass a funding bill by midnight.
House Speaker Mike Johnson and lawmakers tried to come up with “Plan C” on Friday, after two earlier plans failed, according to The Wall Street Journal. On Friday afternoon, he said he would avert a government shutdown, and promised details to follow.
The plan may involve breaking up the short term funding bill into three parts with separate votes for each: funding federal agencies for three months, providing disaster relief, and aid to farmers. The plan also involves raising the deficit limit and lowering spending, although lawmakers will not vote on those now.
Nvidia Stock Climbs On Stock Market Today
Nvidia (NVDA) gained ground Friday after the stock finished higher Thursday, though shares of the Dow Jones component remained below their 50-day moving average. Nvidia rose more than 3% Friday.
Morgan Stanley gave a bullish report on artificial intelligence chipmakers, calling Nvidia a top pick for 2025. The firm also raised its price targets on several other AI chip stocks.
The stock is on IBD Leaderboard although with a hedge, the Granite 2x Short NVDA Daily ETF (NVD).
1:45 p.m. ET
Inflation Eases, Yields Sink
Helping the stock market was the fact that the Personal Consumption and Expenditure index rose 0.1% vs. economists’ estimates of a 0.2% increase month on month. On an annual basis, the index rose 2.4% vs. views of 2.5%. Core inflation rose 0.1% on a monthly basis and 2.8% annually. Economists had expected a monthly increase of 0.2% and 2.9% annually.
12:26 p.m. ET
Magnificent Seven, Buffett Stock Climb
Elsewhere, the University of Michigan’s survey of consumer sentiment for December met preliminary estimates of 74.
Among the Magnificent Seven, Tesla (TSLA) reversed more than 1% higher. Meta Platforms (META) did the same, while Microsoft (MSFT), Amazon.com (AMZN) and Apple (AAPL) also reversed higher. Alphabet and Meta are in the IBD Leaderboard model portfolio.
Warren Buffett’s Berkshire Hathaway (BRKB) holding Occidental Petroleum (OXY) jumped nearly 5% amid news that the famed investor had bought another 8.9 million shares of the oil company. Shares are well below their recent highs of 71.19.
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10:58 a.m. ET
Stock Market Today: Trump Stock Dives
Trump Media & Technology (DJT) was a big loser on the stock market today after reports the president-elect had moved shares to a revocable trust. Shares fell near the 50-day moving average.
Earnings sent FedEx (FDX) stock soaring at first, but gains were minimized as the session wore on. Sales of $22 billion declined 1% while earnings of $4.05 were 1.5% higher than the prior year. FedEx also announced that it would spin off its freight business. Shares soared over 20% but gave up their gains and fell over 1%. The stock undercut the 50 day moving average in heavy volume — a sell signal.
Carnival (CCL) jumped 3% after fourth-quarter results. Sales of $5.9 billion met views but earnings of 14 cents surprised to the upside. Analysts polled by FactSet had expected 8 cents after a 7-cent loss the prior year. But the stock is well past a profit zone.
Obesity drug leader Novo Nordisk (NVO) plummeted after a late stage clinical trial failed. Its experimental drug CagriSema missed a targeted 25% weight loss. Novo stock fell more than 20%. Rival Eli Lilly (LLY) surged 4% but remained below a downward sloping 50-day moving average.
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Dow Jones Stocks
Nike (NKE) fell on the stock market today after its earnings report. Sales fell 8% to $12.4 billion while earnings of 78 cents per share also declined 24% from the prior year. Nike stock is meeting resistance at that key level.
Most health care and finance stocks in the Dow gained while tech and retail leaders lagged.
