04:27 PM EDT, 07/12/2024 (MT Newswires) -- US equity indexes ended the week higher as gains in sectors set to benefit from a cut in interest rates, following a third consecutive month of easing annual consumer price inflation, made up for weakening in technology's narrow market leadership.

* The Dow Jones Industrial Average closed at 40,000.90 on Friday after hitting an all-time high of 40,257.24 intraday, versus 39,118.86 a week ago. The Nasdaq Composite closed at 18,398.44 versus 17,732.60 a week prior. The S&P 500 ended at 5,615.35, compared with 5,460.48 a week earlier.

* Treasury yields, including the 10- and two-year, slumped after the consumer price index showed disinflation underway in areas likely to influence the Federal Reserve's preferred inflation gauge.

* The core CPI was "soft" at 0.06% in June, a note from Macquarie said Friday. The three-month trend has now "moderated considerably" since earlier in the year and rests at 2% annualized, the weakest pace since March 2021. The long-awaited moderation in owners' equivalent rent and rent pushed both indicators into month-over-month pre-pandemic ranges for the first time since 2021. The data point toward a "favorable core [personal consumption expenditures] reading for the month." PCE is the Fed's preferred inflation measure.

* Following the soft inflation data, the probability that the Federal Open Market Committee will cut interest rates by 25 basis points in September soared to 88% by late Friday afternoon from 72% a week earlier, according to the CME Group's FedWatch Tool.

* The week ended with real estate and utilities emerging as the top gainers on sector charts, while communication services and technology were among the worst performers. Also reflective of a potential change in market leadership was the Russell 2000 Index -- home to smaller US companies -- which soared around 6% this week as equity market players gained confidence the Fed will kick off its much-awaited easing cycle in September.