STORY: U.S. stocks ended lower on Friday as investors digested the latest inflation data and weighed political uncertainty after the presidential debate.

After an early rally fizzled, the Dow closed down about a tenth of a percent, the S&P 500 shed four-tenths and the Nasdaq lost seven-tenths of a percent.

Friday's personal consumption expenditures price index showed monthly inflation was unchanged in May, with the annual rate ticking down to 2.6%.

Traders' bets on a rate cut in September rose to 66% after the report's release, LSEG FedWatch data showed.

But Anna Rathbun, chief investment officer at CBIZ, said she wouldn't quite make that same bet.

"September rate cut, in my opinion, is still a little too soon. Between now and September anything can happen and we really need several months of stable prices, stable inflation numbers I think for the Fed to have conviction. [FLASH] So one cut in December, still very likely. Two, maybe. One in September, probably unlikely."

Stocks on the move included Nike, which fell about 20% - its steepest one-day plunge in over two decades.

The sportswear company forecast a surprise drop in annual sales as it struggles to compete with newer brands On and Hoka.

Optical networking gear maker Infinera jumped more than 15% after Nokia said it would acquire the company in a $2.3 billion deal.

And after a shaky debate performance by President Joe Biden against Donald Trump, shares of the former president's Trump Media, parent of his Truth Social, spiked before ending the session down more than 10.5%.