Investor Sentiment Decreases Slightly Following PCE Inflation Data; S&P 500 Snaps Six-Session Win Streak

The CNN Money Fear and Greed index showed a slight decline in the overall market sentiment, but the index remained in the "Extreme Greed" zone on Friday.

U.S. stocks closed mixed on Friday, with the S&P 500 snapping a six-day winning streak. However, the broad market index recorded gains last week. The S&P 500 gained around 1.1%, while the blue-chip Dow added about 0.7% last week.

Shares of American Express Company AXP gained more than 7% on Friday after the company reported fourth-quarter financial results, issued FY24 guidance, and said it plans to increase its dividends. Colgate-Palmolive Company CL shares gained 2% after reporting upbeat fourth-quarter financial results.

On the economic data front, the headline PCE annual inflation rate held at 2.6% in December, matching both the previous and expected rate of 2.6%. On a monthly basis, the PCE price index rebounded with a 0.2% increase, recovering from a 0.1% decline in November and matching the predicted 0.2% rise. U.S. pending home sales surged 8.3% month-over-month in December, beating market estimates of a 1.5% increase and compared to a revised 0.3% decline in November.

Most sectors on the S&P 500 closed on a positive note, with energy and healthcare stocks recording the biggest gains on Friday. However, information technology and real estate stocks bucked the overall market trend, closing the session lower.

The Dow Jones closed higher by around 60 points to 38,109.43 on Friday. The S&P 500 fell 0.07% at 4,890.97, while the Nasdaq Composite fell 0.36% at 15,455.36 during Friday’s session.

Investors are awaiting earnings results from F5, Inc. FFIV, Whirlpool Corporation WHR, Celestica Inc. CLS, and Nucor Corporation NUE today.

At a current reading of 76.7, the index remained in the "Extreme Greed" zone on Friday versus a prior reading of 77.1.

What is CNN Business Fear & Greed Index?

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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