The Dow Jones Industrial Average climbed to a fresh record on Friday as traders digested new data that pointed to further progress in lowering inflation. Wall Street also posted three straight positive weeks.

The 30-stock Dow added 137.89 points, or 0.33%, ending at 42,313.00. The blue-chip average posted a closing record and reached an all-time high during the session. The S&P 500 ticked down 0.13% to 5,738.17, while the Nasdaq Composite lost 0.39% to end at 18,119.59. A 2% decline in Nvidia weighed on the technology-heavy index.

The major averages each extended their gains to a third week, with the S&P 500 and the Dow rising about 0.6% for the period. The Nasdaq advanced nearly 1% during the week.

Traders received encouraging inflation data that could give the central bank more reason to confidently cut interest rates further. August's personal consumption expenditures price index — the Federal Reserve's favored measure of inflation — increased 0.1%, matching expectations from economists polled by Dow Jones. PCE increased 2.2% at an annualized pace, below the 2.3% forecast.

Policymakers and investors alike are hoping for persistent cooling in monthly inflation figures, allowing for continued easing of borrowing costs that will ease the strain on corporate and household balance sheets.

"To the extent that inflation remains under control — and we continue to trend in that direction — the Fed can focus almost entirely on the labor market, which means a rate-cutting bias," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. "As the Fed cuts rates — especially in the absence of recessionary growth — it is a great tailwind for both stock and bond markets and should eventually provide some relief for those consumers that are more interest-rate sensitive," Zaccarelli said.

Wall Street is coming off a winning session, after a batch of data assured investors of the strength of the U.S. economy. Initial jobless claims fell more than expected in the latest week, indicating a strong labor market, while the final reading of second-quarter gross domestic product came in at a robust 3%.