Uncertainty over the magnitude of the cut, coupled with fears of an economic slowdown, could continue to dictate the course of Wall Street in the coming days.
Wall Street: Technology stocks drive the entire market higher
Reuters
Wall Street rose steadily this Friday, setting the stage for strong weekly gains, after expectations for the New York market on a big interest rate cut by the Federal Reserve will increase dramatically overnight.
The S&P 500 (^GSPC) is up about 0.2%, while the tech-heavy Nasdaq Composite (^IXIC) is up 0.5% to mark the fifth day of gains for both gauges amid a rally in tech stocks. The Dow Jones Industrial Average (^DJI) is also up about 0.4%.
Stocks are rising as the market reheats on the odds of a half-point cut by the Fed, after all but ruling out that possibility due to recent inflation and jobs data. Traders now price in the chance of a half-point move at 49%. 50 basis points next week, compared with 15% which was considered at one point on Thursday.
The odds of a 0.5% reduction increased after reports of Financial Times and The Wall Street Journal that the Fed’s September 18 decision will be very tight. Joining the debate, influential former New York Fed President Bill Dudley said there was a “strong case” for a deeper cut.
Wall Street: What the market is analyzing
The yield on the 10-year Treasury note (^TNX) was lower early on Friday, falling 2 basis points to around 3.66%. At the same time, the yield on the 2-year bond, considered sensitive to monetary policy, fell slightly above 3.58%.
Markets have been highly volatile in recent days amid speculation over whether the Fed will opt for a quarter-point or half-point cut in its expected first rate reduction of this cycle. Concerns about a slowing labor market and the risk of a recession have contributed to that volatility, which Wall Street believes could persist if a 0.5% cut is finalized.
federal reserve fed usa powell.jpg
As for individual stocks, Adobe (ADBE) fell in morning trading after the software company’s outlook failed to show a boost from its focus on artificial intelligence. Meanwhile, Oracle (ORCL) shares rose again on an upbeat forecast for revenue growth over the next five years, driven by demand for cloud services.
Boeing (BA) shares fell as workers at its factories went on strike, halting production at its largest plant, the Seattle hub.
Source: Ambito
I am an author and journalist who has worked in the entertainment industry for over a decade. I currently work as a news editor at a major news website, and my focus is on covering the latest trends in entertainment. I also write occasional pieces for other outlets, and have authored two books about the entertainment industry.
