Stock market today: Indexes cap stellar first half of 2024 with losses even after encouraging inflation report

Stocks edged lower despite market excitement over the latest personal consumption expenditures, which showed softening inflation.

• US indexes ended the day lower, despite market excitement over the latest PCE data.
• Both headline and core personal consumption expenditure readings came in 2.6% year-to-year.
• The stock market closed 2024's first half strongly, with the S&P 500 up nearly 15%.

US indexes slid on Friday after temporarily bounding to new records, as investors celebrated the latest inflationary report.

The personal consumption expenditures price index, an inflation gauge favored by the Federal Reserve, notched its lowest reading of three years. Both core and headline PCE fell to 2.6% year-to-year in May, just under the previous month's reading.

Personal spending also picked up month-to-month, with real goods spending rebounding from weak April.

"The soft inflation data will build the case that the Fed can start cutting rates in the coming months," LPL Financial chief economist Jeffrey Roach said. "As long as incomes grow at a healthy clip, consumers will keep spending. The key is the labor market and so now, we should shift our attention to next week's nonfarm payroll release for a fresh look into the job market."

Though that's brought no change to monetary policy expectations in May, investors remain convinced in interest rate cuts this year. Currently, futures markets are pricing in the odds of two

The soft inflation reading was not enough to keep the indexes in the green through Friday, but the stock market still strongly closed out the first half of 2024. Year-to-year, the S&P 500 gained 14.1%, outdone by the Nasdaq's 16.6% increase.

"But there are still areas of relative weakness," Trade Nation's senior market analyst David Morrison wrote. "The old-school Dow only managed to tack on 4%, while the Russell gained a measly 1%. Could these be harbingers of weakness to come, or will they take over as market leaders in the second half?"

Among issues now standing is a worrying bifurcation of the market, where only a handful of stocks are actually leading index gains. At the same time, interest rates remain elevated among signs of a slowing economy, while Nvidia's $430 billion blip this week added worries about the long-term prospect of an AI-led bull run.

Here's where US indexes stood at the 4 p.m. closing bell on Friday:

• S&P 500: 5,460.71, down 0.4%
• Dow Jones Industrial Average: 39,123.92, down 0.1% (40 points)
• Nasdaq composite: 17,732.60, down 0.7%

Here's what else is going on today:

• Warren Buffett will put his $130 billion trove into a charitable fund for his children once he dies, the investing legend told The Wall Street Journal.
• The Berkshire Hathaway executive revealed he has a $600 million trove not tied to company shares.
• The US economy is in a 'selective recession' weighing on lower-income consumers, JPMorgan says.

In commodities, bonds, and crypto:

• West Texas Intermediate crude oil dropped 0.53% to $81.3 a barrel. Brent crude, the international benchmark, ticked 0.18% lower to $84.77 a barrel.
• Gold slipped 0.12% to $2,326. per ounce.
• The 10-year Treasury yield jumped 6 basis points to 4.349%.
• Bitcoin essentially stayed flat at $60,809.21.