dow is on track for best week since november us stocks were climbing friday afternoon following a softerthanexpected inflation report for february while the nasdaq composite was on pace for its largest quarterly advance since 2020 for the week the dow is on track to gain 3 while the sp was on pace to rise 32 and the nasdaq composite was heading for a 31 increase according to factset data at last check us stocks were up sharply friday afternoon as investors weighed data showing signs of moderating inflation core price pressures eased in february barclays said in an economics research note friday on balance the easing in february pce inflation was fairly broadbased across goods and services barring housing the personalconsumptionexpenditures or pce price index increased 03 in february with inflation slowing to 5 year over year from 53 in january according to a report friday from the bureau of economic analysis core pce the federal reserves preferred inflation gauge that excludes energy and food prices rose 03 last month for a yearoveryear rate of 46 thats slightly lower than forecasts from economists polled by the wall street journal and softened from the 47 increase seen over the 12 months through january read inflation softens in february pce finds and gives ammo for fed ratehike pause while the federal reserve has been battling high inflation with interest rate hikes futures traders are betting that rates have already peaked and that the fed will likely reverse course and cut rates at least a couple of times before the end of the year according to the cmes fedwatch tool the market is pricing in a coin flip as to whether the fed raises its benchmark rate by a quarter percentage point at its may policy meeting said matt stucky senior portfolio manager at northwestern mutual wealth management co in a phone interview friday we think were getting pretty close to the end of the ratehiking cycle he said stucky expects the fed may stop hiking once cracks start to form in the labor market with job losses in nonfarm payrolls meanwhile consumer spending edged up 02 in february while personal incomes rose 03 according to a bureau of economic analysis report friday incomes and spending are hanging in there and inflations cooling said mike skordeles head of us economics at truist in a phone interview friday that has positive implications for markets and the economy he said stocks traded higher following the release of the final reading on us consumer sentiment for march from the university of michigan while confidence ticked lower compared with earlier estimates inflation expectations moderated us stocks have held up relatively well this quarter shrugging off the fed rate hikes and renewed recession fears since hitting its highest level of the year in early february the sp 500 has been trading in an increasingly narrow range leaving analysts divided about where the market might be heading next we need to see what the overall economy does said kim caughey forrest founder and chief investment officer of bokeh capital partners i think gdp matters and if gdp holds up while inflation comes down that could be good for stocks the nasdaq composite has risen around 16 since the start of the year putting it on track for its best quarterly gain since the three months through june 2020 according to factset data at last check the technology heavy nasdaq jumped more than 30 in the second quarter of 2020 as stocks rebounded from the global market rout tied to covid19 that year the sp 500 and dow were also track for quarterly gains in late afternoon trading the bond market is definitely more concerned about recession risks than stocks are said skordeles who is expecting a recession in the second half of the year they couldnt be sending more different signals readtwoyear treasury yields on pace for biggest monthly drop since 2008 after bank turmoil new york fed president john williams said friday in a speech at housatonic community college that stress in the us banking system will cause banks to tighten credit and probably lead to lower consumer spending this content was created by marketwatch which is operated by dow jones  co marketwatch is published independently from dow jones newswires and the wall street journal