STORY: U.S. stocks ended higher on Friday, with the Dow gaining roughly two thirds of a percent, the S&P 500 climbing about six-tenths of a percent and the Nasdaq adding more than four-tenths of a percent.
The Personal Consumption Expenditures or PCE Price Index showed inflation ticked up a bit in August, pushing the annual inflation rate to 2.7%, which was in line with expectations.
Meanwhile, solid U.S. consumer spending in August underscored the economy's resilience.
But Brad Bernstein, managing director at UBS Private Wealth Management, said consumer spending is a story of what he called the “haves and have-nots.”
“50% of consumer spending is coming from just 10% of the population, the top 10% income earners. So as we're starting to see some cracks in auto loans and certain areas in the economy that are representative of the more subprime or maybe creeping in a little bit of the prime lending rate categories, the high income earners, the top 10%, especially the top 1%, make up the vast majority of consumer spending, and that area continues to outperform. And that's what's driving the economy.”
Stocks on the move Friday included Electronic Arts, which jumped almost 15% after reports that the company was in advanced talks to go private.
Shares of truck maker Paccar, which makes most of its vehicles for the U.S. market domestically, rose more than 5% a day after President Trump unveiled fresh import tariffs on heavy-duty trucks.
Trump also slapped tariffs on branded pharmaceutical products. Shares of U.S. drugmaker Eli Lilly closed higher.
And five out of the Magnificent 7 megacap tech stocks closed higher, with Tesla leading the pack with a 4% gain.
