The stock market had another somewhat subdued session today, with the S&P 500 (+0.2%), Nasdaq Composite (+0.3%), and DJIA (+0.2%) keeping with the recent trend of modest growth and adding to their week-to-date gains.

Stocks were little changed following the delayed release of the Personal Income/Outlays report for September, which showed in-line Personal Income growth (0.4%) while Personal Spending growth (0.3%; Briefing.com consensus 0.4%) was below expectations. September PCE Price growth (0.3%; Briefing.com consensus 0.3%) was in-line, and core PCE Price growth (0.2%; Briefing.com consensus 0.3%) was slightly cooler than expected, reducing the year-over-year growth rate to 2.8% from 2.9% in August, though this remains well above the Fed's 2.0% target.

While this was the last inflation reading before next week's FOMC decision, it had little effect on the major averages, largely because it had no effect on the market's rate-cut expectations. The CME FedWatch tool currently assigns an 87.2% probability to a December rate cut, down from 88.2% yesterday, and a 25.1% probability to an additional cut in January, down from 25.4% yesterday. 

In corporate news, the headline that Netflix (NFLX 100.24, -2.98, -2.89%) has entered into a definitive agreement to acquire Warner Bros. Discovery (WBD 26.06, +1.52, +6.19%) in a cash and stock transaction worth $72 billion was perhaps the most widely discussed happening today. Paramount Skydance (PSKY 13.36, -1.46, -9.82%) , which also submitted a bid for WBD traded sharply lower, with CNBC reporting that the company is considering taking a direct bid to WBD's shareholders. 

Alongside all of the acquisition buzz, Alphabet (GOOG 322.09, +3.70, +1.16%) and Meta Platforms (META 673.42, +11.89, +1.80%) quietly mounted some of the best performances across mega-cap names, which helped the communication services sector (+1.0%) finish as the top-performing S&P 500 sector. 

Despite some weakness in its own largest components, NVIDIA (NVDA 182.41, -0.97, -0.53%) and Apple (AAPL 278.78, -1.92, -0.68%), the information technology sector (+0.5%) also finished with a solid gain as a majority of its components traded higher. 

The consumer discretionary sector (+0.4%) rounded out the three S&P 500 sectors that finished higher, with Ulta Beauty (ULTA 601.50, +67.55, +12.65%) capturing the widest gain across S&P 500 names after a beat-and-raise Q3 earnings report. 

The financials and real estate sectors finished flat, while six sectors finished lower. Losses were relatively modest, with the exception of the utilities sector (-1.0%), which extended its week-to-date losses to 4.5%, the widest across S&P 500 sectors. 

The health care (-0.4%) and consumer staples (-0.3%) sectors were also among the laggards as defensive sectors faced some pressure this week. 

Overall, the major averages continued to drift modestly higher, with buyers showing little urgency ahead of next week's FOMC decision. With expectations for policy largely unchanged and catalysts scarce, stocks appear content to meander within recent ranges as the market waits for clearer signals from the Fed.

U.S. Treasuries retreated on Friday, sending the 30-year note yield to its highest level since early September, while yields on 5s and 10s settled just below their November highs. The 2-year note yield settled up three basis points to 3.56% (+7 basis points this week), and the 10-year note yield settled up three basis points to 4.14% (+12 basis points this week).

• Nasdaq Composite: +22.1% YTD
• S&P 500: +16.8% YTD
• Russell 2000: +13.1% YTD
• DJIA: +12.7% YTD
• S&P Mid Cap 400: +6.4% YTD

Reviewing today's data:

• September Personal Income 0.4% (Briefing.com consensus 0.4%); Prior 0.4%, September Personal Spending 0.3% (Briefing.com consensus 0.4%); Prior was revised to 0.5% from 0.6%, September PCE Prices 0.3% (Briefing.com consensus 0.3%); Prior 0.3%, September PCE Prices - Core 0.2% (Briefing.com consensus 0.3%); Prior 0.2%
  • The key takeaway from the report is that it revealed a very sticky inflation component that remains well above the Fed's 2.0% inflation target. That likely won't prevent the Fed from cutting rates next week, but it will likely factor into a "hawkish cut," as the Fed implies it will be inclined to wait longer for the next rate cut.
• October Factory Orders DELAYED (Briefing.com consensus -0.3%)
• December Univ. of Michigan Consumer Sentiment - Prelim 53.3 (Briefing.com consensus 52.0); Prior 51.0
  • The key takeaway from the report is its note that consumers' overall view can still be thought of as broadly somber, notwithstanding the month-over-month increase, due to the burden of high prices.
• Consumer credit increased by $9.2 billion in October (Briefing.com consensus: $9.8 billion) following a downwardly revised $11.0 billion increase (from $13.0 billion) in September.
  
  • The key takeaway from the report is that the expansion in consumer credit in October was paced by revolving credit, which could be construed as a sign of consumers leaning more on credit cards to fund spending needs due to disposable income being pinched by higher prices (and missing paychecks for some during the government shutdown).