4:05pm: Mixed finish
US stocks were mixed at Friday’s closing bell, with the Dow Jones setting a fresh closing record.
The index added 0.3% at 42,313 points. The Nasdaq, on the other hand, slipped 0.4% to 18,119 points while the S&P 500 was down 0.1% at 5,738 points.
2:50pm: IPO market shows ‘signs of cautious optimism’
The global IPO market remained resilient amid market volatility and geopolitical shifts during the third quarter, according to a new report from EY Global.
The quarter showed “signs of cautious optimism.” Despite volumes being down 14% at 310 and proceeds falling 35% to US$24.9 billion, Q3 outpaced the first two quarters of the year in IPO launches, the report showed.
For the first three quarters of 2024, both the Americas and Europe, the Middle East, India and Africa (EMEIA) regions saw a year-over-year increase in both the number of IPOs and proceeds.
2:00pm: Late-stage tech funding takes hit
The US led the tech sector in funding with $21.7 billion in 3Q, despite experiencing a 38.2% decline from the previous quarter, as reported by Traxcn.
The $21.7 billion in funding was also a 21.38% drop compared to the same period in 2023, the report noted.
The tech funding landscape for Q3 2024 was characterized by notable drops across various stages of investment.
The seed stage saw $1.84 billion in funding, marking a slight decline of 1.6% from $1.87 billion in Q2 2024, and a 6.6% decrease from $1.97 billion in the same quarter last year.
Early-stage funding plummeted to $8.03 billion, a staggering drop of 54.6% compared to $17.7 billion in Q2 2024 and down 31.4% from $11.7 billion in Q3 2023.
Late-stage funding declined to $11.82 billion from $15.47 billion raised in the previous quarter.
12:15pm: Inflation takes backseat to consumer spending
Stocks were cooler around the midday point of trading Friday.
The Dow continued to lead the pack at nearly 0.6% higher than its opening levels, but it was the sole standout as the S&P 500 dipped slightly under the flatline and the Nasdaq slipped around 0.4% under.
As Jamie Cox, Managing Partner for Harris Financial Group noted, inflation is no longer the story in the PCE data for the Fed.
“It’s now all about spending and keeping the economy strong,” Cox commented.
“If you were second guessing the Fed going .50 in September, you aren’t now. These data suggest another .50 in November is likely.”
10:55am: Fed 'vindicated'
The Federal Reserve is "vindicated" by PCE data, according to Kathleen Brooks, research director at XTB.
Brooks noted that the preferred inflation measure showed a sharper-than-expected decline, marking the lowest level since 2021.
Meanwhile, the core PCE's monthly rise of 0.1% was only half of what economists had anticipated.
"Personal income and spending were both lower than expected, which suggests that the Fed made the right choice when deciding to cut interest rates by 50 basis points last week," Brooks wrote.
"It might also lead to investors becoming more willing to trust the Fed when it comes to future rate decisions, which may take some of the shine off the gold price in the short term."
9.42am: Wall Street off to bright start
Wall Street enjoyed a positive start on Friday after figures showed personal consumption expenditures (PCE) subsided in August.
The Dow Jones ticked up 0.3% as the market opened, while the S&P 500 and Nasdaq both climbed close to 0.2% respectively.
Figures from the Bureau of Economic Analysis earlier in the day had shown the Federal Reserve’s preferred measure of inflation, PCE, eased last month, spelling positive news for further interest rate cuts later this year.
The headline rate came in slightly lower than expectations of 2.3% at 2.2%, having eased from 2.5% in July.
Core PCE, excluding energy and food prices, ticked up 2.7% as anticipated, following a 2.6% increase a month earlier.
An absence of a shock in the figures averted fears that the Federal Reserve may be tied in cutting interest rates further, after September’s 0.5% reduction.
8.49am: Personal consumption expenditures ease in August
Personal consumption expenditures (PCE) climbed slightly slower than expected last month, figures from the Bureau of Economic Analysis showed on Friday.
The headline rate ticked up by 2.2% in August, against July’s 2.5% and below expectations for a 2.3% increase.
Core PCE, which excludes volatile energy and food prices, climbed by 2.7% as anticipated by analysts following a 2.6% increase a month earlier.
Markets had been looking to the figures, which reflect the Federal Reserve’s preferred measure of inflation, to provide clarity over the depth of the next base interest rate cut in the US, after September’s 0.5% reduction.
Month on month, both the core and headline figures increased by 0.1% after rising by 0.2% in July.
Following an annual rate of 3.3% in August last year, Scope Market’s analyst Joshua Mahony said a subsiding figure this time around would “further strengthen the case” for another 0.5% base rate cut in November.
Futures had the Nasdaq, Dow Jones and S&P 500 all higher following the figures.
7.24am: Stocks seen lower
Optimism that China had finally struck a note in addressing its struggling economy looked not to stretch to US stocks on Friday, as futures saw Wall Street falling at the open.
The Nasdaq looked set for a 0.2% drop ahead of Friday’s trading, while futures had the Dow Jones and S&P 500 also both off the mark.
This was as markets awaited personal consumption expenditures data for August, with the figures reflecting the Federal Reserve’s preferred measure of inflation.
Following a 0.2% uptick in July, consensus was for another 0.2% increase last month as speculation circled around how aggressively the Fed would continue to cut base interest in the months ahead.
This would see the figure climb by 2.3% on an annual basis, after rising by 3.3% in August last year.
Scope Markets analyst Joshua Mahony said the reading was “set to bring a fresh insight into the trajectory of prices” as traders weighed up the prospect of another 0.5% cut to base interest in November.
“Improved GDP and jobless claims data yesterday has helped allay some of the fears that we could see a potential hard landing in the US,” he said.
A reading in line with expectations would “further strengthen the case” for another such cut, he added, after the Fed’s first 0.5% reduction this month.