Wall Street’s major indexes were subdued in choppy trading on Friday, easing from the previous session’s record highs, but they remained on track to log gains in a week of economic reports that solidified expectations for interest rate cuts.
The Nasdaq briefly hit an intraday record high on Friday.
On Thursday, markets were boosted by a rally in shares of Tesla and Micron Technology while a monthly inflation report kept the U.S. central bank on track to cut rates next week.
Traders were already pricing in a 25-basis point easing in monetary policy after a series of recent indicators had shown that the labor market was worse than previously thought.
The bleak August nonfarm payrolls, however, brought up bets on a bigger 50-bps cut, that currently stand at 7.5%, CME’s FedWatch tool showed.
After the inflation data, market pricing now reflects expectations for three quarter-point cuts - one at each remaining Fed meeting this year.
“We’re likely going to see 75 basis points one way or the other this year and likely another 50-75 basis points over the next 12 months … that’s more important than necessarily the cadence of how we receive that,” Art Hogan, chief market strategist at B Riley Wealth.
Wall St hits record highs as rate cut bets intact after inflation data
A preliminary reading of the University of Michigan’s consumer sentiment index for September came in at 55.4, compared with estimates of 58, according to economists polled by Reuters.
At 10:06 a.m. ET the Dow Jones Industrial Average fell 77.06 points, or 0.17%, to 46,030.94, the S&P 500 gained 1.10 points, or 0.02%, to 6,588.57 and the Nasdaq Composite rose 44.57 points, or 0.20%, to 22,087.64.
Declines in communication services stocks including Alphabet and Meta Platforms offset gains in heavyweight tech stocks on the S&P 500.
Energy stocks on the benchmark index were higher, tracking a near 2% surge in oil prices.
Meanwhile, losses in industrials and consumer discretionary stocks weighed on the Dow.
Nevertheless, all three major indexes are poised to record weekly gains, largely helped by a revival in artificial intelligence trade after cloud computing giant Oracle’s upbeat forecast on Tuesday.
It sparked a rally in AI-linked semiconductors and utilities companies powering data centers earlier in the week, setting up the S&P 500 information technology sector to outperform peers this week.
The indexes are in positive territory for September so far - a month that is deemed bad for U.S. equities historically, where the benchmark S&P 500 has shed 1.5% on average since 2000, data compiled by LSEG showed.
Among stocks, Warner Bros Discovery was 8.9% higher, extending Wednesday’s over 28% gains, as a source said Paramount Skydance was preparing a bid for the Hollywood studio.
Microsoft rose 1.2% after it reached a non-binding deal with OpenAI to allow it to restructure itself into a for-profit company.
Super Micro Computer gained 3.7% after the AI server maker began volume shipments of Nvidia’s blackwell ultra systems.
Declining issues outnumbered advancers by a 2.02-to-1 ratio on the NYSE and by a 1.77-to-1 ratio on the Nasdaq.
The S&P 500 posted 16 new 52-week highs and two new lows, while the Nasdaq Composite recorded 58 new highs and 11 new lows.
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