Written by Echo One
(Reuters) – The blue-chip Dow Jones Industrial Average hit a record high on Friday as investors cheered subdued inflation reports and small-cap stocks that would benefit from further interest rate cuts by the Federal Reserve also rose. The trade closed at the value.
The tech-heavy Nasdaq fell and the S&P 500 fell slightly, but both indexes remained near recent highs. All three Wall Street indexes recorded increases for the third consecutive week.
“The market is pretty much pricing in a soft landing right now, pricing in inflation being overcome and the Fed being able to cut rates without doing too much damage to the economy,” he said. said Liz Young Thomas, head of investment strategy at SoFi in New York.
The Department of Commerce reported that consumer spending increased moderately while inflationary pressures continued to ease. Separately, the University of Michigan’s final measure of consumer sentiment for September came in at 70.1, beating economists’ expectations of 69.3, according to a Reuters poll.
According to preliminary data, the S&P 500 Index fell 7.64 points, or 0.13%, to end at 5,737.68 points, while the Nasdaq Composite Index fell 73.41 points, or 0.40%, to 18,116.88 points. The Dow Jones Industrial Average rose 130.51 points, or 0.31%, to 42,305.62.
The Russell 2000 index, which measures small-cap stocks that are performing well in a low interest rate environment, rose to a one-week high.
Nvidia’s stock price fell, weighing on the technology-heavy Nasdaq.
Investors currently marginally support the possibility of a 50 basis point rate cut at the next Fed meeting, with a 52.1% chance, according to CME Group’s FedWatch tool, a coin toss ahead of the data. It is rising more than that.
The Fed cut interest rates by 50 basis points last week as price pressures cooled. The focus now shifts to a number of labor market reports to be released next week.
Among individual stocks, Bristol-Myers Squibb rose sharply after the U.S. Food and Drug Administration (FDA) approved a drug to treat schizophrenia.
Costco Wholesale fell after weak fourth-quarter sales.
U.S.-listed stocks of Chinese companies including Alibaba, PDD Holdings and NetEase rose after China’s central bank cut interest rates and injected liquidity into the banking system.
The optimism extended to miners, with Arcadium rising and BHP’s US-listed shares also rising.
(Reporting by Echo One in New York; Additional reporting by Johan M. Cherian and Purvi Agarwal in Bengaluru; Editing by Anil D’Silva, Maju Samuel and David Gregorio)
