Last week, the three major US stock indices saw mixed performances at the close. DJIA rose by 331.47 points, up 0.8%, closing at 39,807.37 points; the S&P 500 rose by 20.17 points, up 0.4%, closing at 5,254.35 points; while the Nasdaq fell by 49.36 points, down 0.3%, closing at 16,379.46 points.

Key Takeaways:
Stocks close out strong quarter with gains;
Consumers grow more positive but remain worried

Most of the major indexes advanced over the shortened trading week to end a quarter of strong gains. The S&P 500 Index recorded new closing and intraday highs to end the week.

The week’s economic calendar was somewhat busier. On Tuesday, the Commerce Department reported that durable goods orders rose 1.4% in February, somewhat more than expected, although part of the increase was due to a revision in January’s steep decline, from 6.2% to 6.9%. Excluding the volatile defense and aircraft segments—a gauge that is considered to more closely reflect business spending plans—orders rose a solid 0.7%, much more than anticipated and partly reversing two months of declines. New home sales fell unexpectedly in February, but the report of the decline came in the wake of previous news of a jump in sales of existing homes.

Consumer indicators were mixed. On Tuesday, the Conference Board announced that its index of consumer confidence declined slightly in March, defying consensus expectations for an increase. “Consumers’ assessment of the present situation improved in March,” the Board’s chief researcher noted, “but they also became more pessimistic about the future.”

Better news came on Thursday from the University of Michigan’s rival gauge of consumer sentiment, which was revised upward to its highest level in 21 months, thanks in part to waning inflation fears. “Over the first three months of 2024, consumers have consistently expressed that the economy appears to be holding its course,” its chief researcher noted. “However, with the general election looming on the horizon, many mentioned that their views remain tentative and subject to change.”

PCE rose 0.3% month over month in February, below an upwardly revised 0.4% rise in January, and also shy of the Trading Economics consensus forecast of 0.4%. Prices for services climbed 0.3% and goods rose 0.5%. The annual rate of 2.5% met forecasts but rose from 2.4% in January.

Monthly core PCE inflation, which strips out food and energy and is the Fed's preferred inflation measure, slowed to 0.3% from an upwardly revised 0.5% in January, matching expectations. The annual core inflation rate slowed to 2.8%, the lowest in about three years, from 2.9%. That, too, met expectations, but the downward progress continues to lag well above the Fed's 2% target rate.

On Friday, Fed Chairman Jerome Powell reiterated that central bankers need to see further signs price pressures are cooling and officials aren't likely to act until they see "more good inflation readings." Powell's comments seemed to echo the sentiment from Fed governor Christopher Waller, who noted Wednesday that recent inflation data make the case for officials to hold off on lowering rates in the short term.

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