Dow Closes at All-Time High; S&P 500, Nasdaq Fall

The Dow Jones Industrial Average closed at its record highest Friday as markets evaluated the latest economic data, including the Federal Reserve's preferred inflation measure.

The Dow rose 0.3% to 42,313, while the Nasdaq Composite fell 0.4% to 18,119.6. The S&P 500 dropped 0.1% to 5,738.2. Among sectors, technology saw the steepest decline, while energy led the gainers.

For the week, the Nasdaq advanced nearly 1%, while the Dow and the S&P 500 gained 0.6% each.

In economic news, US consumer spending eased more than expected in August, while the Fed's preferred inflation metric rose year over year, but met Wall Street's estimates, government data showed.

The Fed's preferred core measure — which excludes the volatile food and energy components — increased 2.7% annually last month, compared with 2.6% in July. Sequentially, the core measure fell to 0.1% from 0.2%.

"The Fed's preferred core measure continues to head in the right direction, even though base effects are boosting the yearly pace," TD Economics said in a report. "Given that inflation continues to remain contained, the Fed will be paying even keener attention to labor market developments, with September payrolls data released next Friday as they calibrate further policy action."

US consumer sentiment rose in September, while year-ahead inflation expectations edged lower, according to final results from the University of Michigan's Surveys of Consumers.

The US two-year yield fell 5.6 basis points to 3.57% Friday, while the 10-year rate lost 3.3 basis points to 3.76%.

In company news, HP HPQ shares declined 3.9%, among the worst performers on the S&P 500, as BofA Securities downgraded the stock to neutral from buy.

Wynn Resorts WYNN was the top gainer on the S&P 500, up 7.2%, as Morgan Stanley upgraded the stock to overweight from equal-weight and adjusted its price target to $104 from $97.

Tesla TSLA is expected to report Q3 vehicle deliveries above the Street's estimates amid strength in its key China market, along with price and demand stabilization, Wedbush Securities said in a client note. The electric vehicle maker's shares closed 2.5% higher.

West Texas Intermediate crude oil rose 1.4% to $68.6 a barrel.

Gold dropped 0.8% to $2,674.80 per troy ounce, while silver lost 1.4% to $31.91 per ounce.