U.S. stocks closed slightly higher on Friday as investors were digesting the latest inflation data.

The Dow Jones Industrial Average added 14.31 points, or 0.07 percent, to 21,858.32. The S&P 500 gained 3.11 points, or 0.13 percent, to 2,441.32. The Nasdaq Composite Index was up 39.68 points, or 0.64 percent, to 6,256.56.

The Consumer Price Index for All Urban Consumers rose 0.1 percent in July on a seasonally adjusted basis, the U.S. Labor Department reported Friday, lower than market consensus of a 0.2-percent gain. Over the last 12 months, the all items index rose 1.7 percent.

The soft inflation data raised market expectation for the Federal Reserve to hold lower interest rates longer this year.

Just 38 percent of investors expected the central bank to rates again at the end of the year, down from about 45 percent, according to the latest CME Group's FedWatch tool.

In corporate news, U.S. social media company Snap posted a larger-than-expected loss and smaller-than-expected revenue, sending the stock down more than 10 percent.

Moreover, gains of the stocks were muted on Friday as tension between the United States and the Democratic People's Republic of Korea (DPRK) persisted.