04:53 PM EST, 12/20/2024 (MT Newswires) -- US equity indexes fell this week as a slowdown in the Federal Reserve's interest-rate cuts next year and mounting concern of a partial government shutdown outweighed an easing in the central bank's preferred inflation gauge.

* The S&P 500 stood at 5,930.85 versus 6,051.09 a week earlier and the Nasdaq Composite closed at 19,572.60 compared with 19,926.72 a week prior. The Dow Jones Industrial Average ended Friday at 42,840.26 compared with 43,828.06 a week ago.

* On Wednesday, the Fed lowered its forecast for interest-rate cuts next year to two from four after cutting its target rate by 25 basis points. It also raised its inflation outlook for 2025. Further, the central bank upgraded its neutral rate forecast, a Desjardins note said.

* Then, late Thursday, a bill proposed by House Republicans that would suspend the debt ceiling for two years and fund the government for three months failed.

* On Friday, CNN reported House Speaker Mike Johnson, who had negotiated the original bipartisan deal that President-Elect Donald Trump rejected, told reporters that the government shutdown would be averted but did not provide specifics of his plan. "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," a Scotiabank note said.

* The Fed's preferred inflation data released Friday calmed frayed nerves. The headline and core month-over-month personal consumption expenditures, or PCE, price index slowed in November, beating forecasts. Year-over-over, both headline and core price pressures were lower than expected.

* "The PCE inflation print is favorable for our outlook for continued rate cuts in early 2025," Morgan Stanley's 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."