NEW YORK, Oct 28 — US stocks closed mostly lower on Friday, losing momentum as investors digested a hectic week of mixed earnings, and economic data that seemed to support the "higher for longer” interest rate scenario.

The Nasdaq advanced, with tech and tech-adjacent momentum stocks led by Amazon.com, Apple and Meta Platforms providing much of the heavy lifting, while the S&P 500 and the Dow Jones Industrial Average lost ground.

All three indexes notched weekly losses steeper than 2 per cent.

The benchmark S&P 500 closed 10.28 per cent below its July 31 closing high.

"It’s hard to fight the trend in the market, and the trend has been lower,” said Ross Mayfield, investment strategy analyst at Baird in Louisville, Kentucky. "Earnings have been fine but they’re not providing the kind of catalyst to spark a reversal to the upside.”

The Commerce Department’s hotly anticipated Personal Consumption Expenditures (PCE) report showed inflation gradually cooling down as expected, getting closer to the Federal Reserve’s 2 per cent annual target while consumer spending, which accounts for about 70 per cent of the US economy, posted a robust upside surprise.

"The economy would be just fine with inflation around 3 per cent,” Mayfield added. "It’s that last mile of getting where we are today to the Fed target. It just depends how aggressively (the Fed) want(s) to pursue a hard 2 per cent. That’s the big question.”

The data did little to move the needle regarding market expectations that the Fed will leave its key interest rate unchanged at its November policy meeting.

Market participants are nearing the end of a busy earnings week, during which nearly one-third of the companies in the S&P 500 posted third-quarter results.

As of yesterday, the reporting season had essentially reached the halfway point, with 245 of the companies in the S&P 500 having reported. Of those, 78 per cent have delivered consensus-beating earnings.

Analysts now expect aggregate annual S&P earnings growth of 4.3 per cent, a sharp improvement over the 1.6 per cent growth seen at the beginning of the month.

"Big tech earnings were priced for perfection, and they were mostly just ‘good.’ That was not enough,” Mayfield said. "But the broader picture is good. This could be the building blocks for a rally to year end.”

Amazon.com jumped 6.8 per cent after the e-commerce giant reported its cloud business growth is stabilizing and predicted a revenue increase over the holiday season.

Intel surged 9.3 per cent following the chipmaker’s consensus-beating quarterly report, lifting the whole sector.

The Philadelphia SE Semiconductor index advanced 1.2 per cent.

The Dow Jones Industrial Average fell 366.71 points, or 1.12 per cent, to 32,417.59, the S&P 500 lost 19.86 points, or 0.48 per cent, at 4,117.37 and the Nasdaq Composite added 47.41 points, or 0.38 per cent, at 12,643.01.

Among the 11 major sectors of the S&P 500, energy suffered the steepest percentage drop. Consumer discretionary tech and communication services were the only gainers.

Chevron dropped 6.7 per cent after the oil and gas company reported lower third-quarter profit. Shares of Exxon Mobil gave up early gains, falling 1.9 per cent after it posted a 54 per cent year-on-year drop in profit.

Ford Motor sank 12.2 per cent after it withdrew its full-year forecast due to "uncertainty” over the pending ratification of its deal with the United Auto Workers union, and warned of continued pressure on electric vehicles.

Declining issues outnumbered advancers on the NYSE by a 2.69-to-1 ratio; on Nasdaq, a 2.08-to-1 ratio favoured decliners.

The S&P 500 posted no new 52-week highs and 67 new lows; the Nasdaq Composite recorded 10 new highs and 478 new lows.

Volume on US exchanges was 10.55 billion shares, compared with the 10.69 billion average for the full session over the last 20 trading days. — Reuters