News

WASHINGTON (Reuters) -U.S. consumer spending increased in November amid strong demand for a range of goods and services, underscoring the economy's resilience, which saw the Federal Reserve this week projecting fewer interest rate cuts in 2025 than it had in September. The report from the Commerce Department on Friday showed moderate monthly rises in prices, with a measure of underlying inflation posting its smallest gain in six months. "The economy continues to grow from strong consumer demand as income growth and the wealth effect from higher portfolio values give consumers capacity to spend," said Jeffrey Roach, chief economist at LPL Financial.

An inflation gauge that is closely watched by the Federal Reserve barely rose last month in a sign that price pressures cooled after two months of sharp gains. The milder inflation figures arrive two days after Federal Reserve officials, led by Chair Jerome Powell, rocked financial markets by revealing that they now expect to cut their key interest rate just two times in 2025, down from four in their previous estimate. Stickier inflation, Powell said, “might be the single biggest factor” causing the central bank to reduce the number of rate cuts it envisions.

The benchmark S&P 500 is up more than 23% for 2024, even after a major stumble this week, and Wall Street has historically often enjoyed a strong annual close. Since 1969, the last five trading days of the year combined with the first two of the following year have yielded an average S&P 500 gain of 1.3%, a period known as the "Santa Claus Rally," according to the Stock Trader's Almanac. But this year, there are signs Santa Claus may disappoint.

Ed Cole, head of multi strategy, equities at Man Group talks inflation risks and the problem with investors all in on the U.S. market.

Historically, the fourth quarter is the bitcoin's best; this year it's underperforming.

How to invest when stocks are at all-time highs.

LONDON (Reuters) -U.S. stock index futures pared some declines on Friday after data showed inflation in the world's largest economy cooled slightly last month, while European shares came under fire after Donald Trump's latest threat to impose tariffs. U.S. Treasury yields also fell, with the benchmark 10-year yield sliding 6.6 basis points (bps) to 4.504%. U.S. stock futures were down 0.6-0.8%, indicating Wall Street was set to open lower, but that compared to declines of 0.8-1.3% earlier in the day.