01:53 PM EST, 12/20/2024 (MT Newswires) -- US equity indexes jumped midday Friday, after a selloff pre-bell as a benign inflation print helped stabilize investor sentiment amid Washington trying to avert a partial government shutdown.

The S&P 500 soared 1.6% to 5,961.7, with the Nasdaq up 1.6% to 19,673.5 and the Dow Jones Industrial Average 1.7% higher at 43,043.2. All sectors were up intraday, with real estate, healthcare, and financials leading the gainers.

The Dow and the Nasdaq futures sank more than 250 points each, and the S&P 500 was 50 points lower before the market opened for regular trading. While concern remains the US government is heading for a partial shutdown, the Federal Reserve's preferred inflation data offered relief as month-over-month price growth slowed. The CBOE's Volatility Index (VIX), known as the fear gauge, sank by 19% after midday.

A bill proposed by House Republicans that would suspend the debt ceiling for two years and fund the government for three months failed late on Thursday, indicating that a partial shutdown will begin tonight if the Friday deadline runs out, according to a research note from D.A. Davidson. The House of Representatives voted down 235-to-174, including 38 Republicans, a House GOP solo deal to fund the government, a Scotiabank note said.

House Speaker Mike Johnson, who negotiated the original bipartisan deal that President-Elect Donald Trump rejected, told reporters he has a plan to avert a shutdown and expects lawmakers to vote again, CNN reported.

"It's possible a grand bargain is struck, but a more likely scenario may either be a protracted disagreement or a series of patchwork arrangements that offer temporary funding for some time," Derek Holt, head of capital market economics at Scotiabank, said in the note.

The headline personal consumption and expenditures price index grew 0.1% in November versus a 0.2% increase in October. Year over year, inflation rose to 2.4% from 2.3%. Wall Street expected 0.2% sequential and 2.5% annual rise. The Fed's preferred core measure was flat at 2.8% annually, but eased to 0.1% from 0.3% sequentially. The market predicted 2.9% and 0.2% growth, respectively.

The month-over-month core PCE growth lagged the "mid-teens" outlook that Fed Chair Jerome Powell had set out at Wednesday's press conference, according to a note from economists at Morgan Stanley. "The PCE inflation print is favorable for our outlook for continued rate cuts in early 2025," Chief US Economist Michael Gapen said. "The positive signal came from the slowdown in shelter inflation and that should show through once the temporary storm-related firmness in autos subsided."

The US Dollar index fell 0.6% to 107.72 intraday, retreating from its 52-week high on Thursday.

Gold jumped 1.4% to $2,643.9 an ounce and silver 1.8% to $29.95 per ounce.

Most US Treasury yields fell intraday, with the 10-year down 6.6 basis points to 4.52% and the two-year rate 1.9 basis points lower at 4.3%.

In company news, Nike ( NKE ) reported a decline in fiscal Q2 earnings and revenue. Truist Securities said Chief Executive Officer Elliot Hill's accelerated turnaround efforts are driving pressure on the outlook for fiscal H2 2025. Nike ( NKE ) stock was down nearly 1%.

FedEx's ( FDX ) fiscal Q2 earnings rose more than analysts had expected, while revenue missed forecast. The parcel delivery group unveiled plans to spin off its freight operations into a separate publicly listed company. FedEx ( FDX ) shares were up almost 1%.

West Texas Intermediate crude oil futures rose 0.3% to $69.58 a barrel, recouping earlier declines.