Global stocks edge higher to hit fourth consecutive month of gains on US economic data

The S&P 500 rose 1 per cent on Friday to finish August with a gain of 2.3 per cent

Traders work the floor of the New York Stock Exchange on August 16. AFP

Global stocks closed higher on Friday, ending a tumultuous August and marking the fourth consecutive month of gains, after US economic data raised expectations that the Federal Reserve will cut interest rates modestly in September.

On Wall Street, the S&P 500 rose 1 per cent to finish August with a gain of 2.3 per cent, while the Dow Jones Industrial Average rose 0.6 per cent to set an all-time high and the Nasdaq Composite climbed 1.1 per cent.

"The US economy rebounded in Q2 but the rebound didn’t increase price pressures. In plain English, the data tasted exactly how investors love it – with the additional sweet topping – for the Fed rate cut expectations – that it has slowed in the Q3 but slowed from a higher mark," Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said.

The market closed on a high note after US inflation rose 0.2 per cent in July, according to data by the Commerce Department released on Friday. Consumer spending, which accounts for more than two-thirds of US economic activity, rose 0.5 per cent last month, the report showed.

The Fed has held its benchmark rate steady since July 2023. The Fed may begin cutting interest rates for the first time in four years at its meeting on September 17 and September 18.

In Asia, Tokyo's Nikkei fell 1.16 per cent for the month after rising 0.74 per cent on Friday.

Hong Kong's Hang Seng index rose 1.14 per cent on Friday, while the Shanghai Composite gained 0.68 per cent.

In Europe, London's FTSE 100 bucked the trend as it eased 0.04 per cent, while the Paris CAC 40 slipped 0.13 per cent.

Oil prices fell on Friday at the market close. Brent crude settled 1.43 per cent lower at $78.80 a barrel, marking a drop of 0.3 per cent for the week and 2.4 per cent in August.

US West Texas Intermediate crude also settled down 3.11 per cent to $73.55, a decline of 1.7 per cent in the week and a 3.6 per cent decrease for the month.

Gold prices weakened on Friday but recorded a 2.8 per cent monthly gain for August. Spot gold lost 0.71 per cent to $2,503.4 an ounce, while US gold futures settled 1.3 per cent lower at $2,527.6