04:54 PM EDT, 09/26/2025 (MT Newswires) -- US equities rebounded Friday after a three-day drop as traders weighed remarks by two Federal Reserve officials and an upbeat consumer spending report.

The Dow Jones Industrial Average rose 0.7% to 46,247.3, while the S&P 500 climbed 0.6% to 6,643.7. The Nasdaq Composite advanced 0.4% to 22,484.1. Barring consumer staples, all sectors ended in the green, led by utilities.

All three main indexes posted losses for the week. The Nasdaq fell 0.7% and the S&P 500 dropped 0.3% after three consecutive weekly gains. The Dow slipped 0.2% following a back-to-back weekly advance.

Richmond Fed President Tom Barkin said Friday that downside risks to employment will likely be limited, while factors including productivity growth would help contain upward pressure on inflation.

Barkin noted that despite a marked slowdown in job growth, the unemployment rate has remained relatively stable as labor supply and demand are contracting at a similar pace. He also pointed out strong consumer demand and healthy underlying dynamics for businesses.

"After years of low hiring, (businesses) should have fewer extra workers and therefore be less likely to need to resort to sizable layoffs," Barkin said in prepared remarks for delivery at the Peterson Institute for International Economics in Washington, D.C.. "Net that means the downside in the labor market should be limited."

While inflation remains above the Federal Reserve's 2% target as tariffs have pushed prices higher, Barkin said "price-setters seem reluctant to make price increases too visible." He highlighted higher productivity growth, which "helps offset margin pressure in a way that limits inflation," Barkin said.

Meanwhile, a seemingly cautious spending approach by consumers should "limit the magnitude" of pricing gains, he said.

Separately, Fed Vice Chair for Supervision Michelle Bowman on Friday reiterated that policymakers are at a "serious risk of already being behind the curve" in addressing a weakening labor market.

Earlier this week, Fed Chair Jerome Powell said the Federal Open Market Committee faces a "challenging situation," with near-term risks to inflation tilted to the upside and those to employment leaning downside.

US Treasury yields were mixed, with the 10-year rate rising 1.7 basis points to 4.19% while the two-year rate was little changed at 3.65%.

In economic news, US consumer spending grew in August at the fastest pace since March, while the Fed's preferred core inflation metric held steady, according to the Bureau of Economic Analysis. The headline personal consumption expenditure price index accelerated both annually and sequentially.

"The US consumer continued to power ahead last month bolstered by strong disposable personal income growth and ample savings," said Scott Anderson, chief US economist at BMO. "Muted inflation pressure so far from tariffs is keeping a lid on goods inflation, and we even saw a decline in durable goods prices last month. This report sets us up for another decent quarter of real consumer spending and GDP growth in (the third quarter)."

On Thursday, President Donald Trump said the US will impose tariffs of 25% on heavy trucks and 50% on kitchen cabinets and bathroom vanities, effective Wednesday. Additionally, the US will charge 100% levies on branded or patented pharmaceutical products.

US consumer sentiment dropped in September amid concerns regarding the prospects of higher inflation and a labor market deterioration, according to a survey by the University of Michigan.

"Consumers continue to express frustration over the persistence of high prices, with 44% spontaneously mentioning that high prices are eroding their personal finances, the highest reading in a year," Surveys of Consumers Director Joanne Hsu said.

West Texas Intermediate crude oil was up 0.5% at $65.30 a barrel in Friday late-afternoon trade.

In company news, Electronic Arts ( EA ) shares surged nearly 15%, the biggest gainer on the S&P 500. The videogame publisher is nearing a deal to go private in a transaction that could value it at roughly $50 billion, The Wall Street Journal reported Friday, citing people familiar with the matter.

Boeing ( BA ) shares rose 3.6%, the top gainer on the Dow, after the US Federal Aviation Administration said the plane maker will regain authority to issue airworthiness certificates for some of its 737 Max and 787 jets, starting Monday.

Tesla's (TSLA) third-quarter deliveries are likely to top market estimates amid stabilizing global demand as the electric vehicle maker takes major steps in advancing its artificial intelligence push heading into 2026, Wedbush Securities said. Tesla shares were up 4%.

Costco Wholesale ( COST ) shares fell 2.9%, the steepest decline on the S&P 500. Late Thursday, the warehouse chain logged fiscal fourth-quarter earnings and revenue above market expectations, but comparable sales missed Wall Street's estimates.

Gold was up 0.6% at $3,794 per troy ounce, while silver jumped 2.9% to $46.41 per ounce.