US stocks made modest gains on Friday afternoon as investors digested the latest inflation data, which showed a decrease in pricing pressure for November. The Dow Jones Industrial Average (DJI) rose 0.1%, while the S&P 500 (GSPC) and the Nasdaq Composite (IXIC) both advanced by around 0.3%.

Investors are optimistic that the Federal Reserve will soon begin to lower borrowing costs, leading to a potential eighth consecutive week of gains on Wall Street. The S&P 500 is on track to reach a fresh record high amid investors' faith in the central bank's actions.

The latest inflation reading, provided by the Personal Consumption Expenditures (PCE) index, revealed that prices excluding food and energy rose 3.2% in November from the previous year, slightly lower than analysts' expectations of a 3.3% increase. This data supports the belief that disinflation is taking hold, increasing optimism for the economy and the market.

However, across the pond, the United Kingdom is facing potential economic challenges. Revised data from the Office for National Statistics (ONS) showed that the UK economy contracted by 0.1% in the three months leading to the end of September, marking a downgrade from the previous estimate of no growth. This negative revision raises concerns about the possibility of the UK falling into a recession, defined as two consecutive quarters of negative economic growth.

The downward revision was primarily driven by a worsened estimate for the services sector, which fell by 0.2% in the third quarter. The GDP estimate for the second quarter was also revised down to zero growth from the previous estimate of 0.2%. Should the UK economy contract in the current quarter ending in December, it will meet the technical definition of a recession.

In individual stock movements, Nike shares (NKE) plunged approximately 11% after the company warned of weaker consumer spending and announced plans for job cuts. This news also impacted other sportswear manufacturers, leading to a decline in their stock prices.

On the broader economic front, a survey conducted by Challenger, Gray, and Christmas revealed that fewer companies are providing year-end bonuses to their employees in 2023. The survey found that 34% of employers opted not to award bonuses, reflecting a decrease from 27% in the previous year. Additionally, 15% of companies reported cutting the value of their bonuses.

Looking ahead, investors are closely monitoring economic indicators and Fed actions. While the latest inflation data supports the case for rate cuts, some market watchers remain cautious, considering the potential risk of inviting a fresh wave of inflation as the economy shows signs of resilience.

Overall, US stocks continue to show resilience in the face of economic uncertainties, while the UK faces potential challenges amid concerns of a downturn.