U.S. main stock indexes inched up on Friday and small-cap stocks outperformed after a benign inflation report cleared the way for the Federal Reserve to focus on shoring up the labor market while continuing its interest rate easing.

Wall Street is poised for a modest rise following encouraging inflation data, which showed the U.S. personal consumption expenditure index rose by 2.2% annually. This has raised expectations for a potential interest rate cut by the Federal Reserve.

Data that show dropping inflation and sustained economic growth kept investors in a positive state of mind after last week’s interest rate cut.

Wall Street was set for a marginally higher open on Friday after data underscored the narrative that price pressures were cooling, raising expectations that the Federal Reserve's next move might be another outsized interest rate cut.

Stock indexes opened higher on Wall Street on Friday, with the S&P 500 nearing record highs. This rise follows soft inflation data, which has led to expectations that the Federal Reserve will now focus on strengthening the labor market and continue to ease interest rates.

U.S. stock indexes remained stuck in place as Wall Street made few big moves ahead of what’s expected to be the first cut to interest rates in more than four years.

Wall Street's main stock indexes opened higher on Friday, with the S&P 500 near record highs, after soft inflation data raised expectations that the Federal Reserve could now focus on shoring up the labor market and continue easing interest rates.