Nasdaq, S&P 500 inch higher ahead of Labor Day weekend on hopes of rate cuts By Reuters
Written by Johann M Cherian and Purvi Agarwal
(Reuters) – Wall Street's main indexes rose on Friday and were set for monthly gains after a key inflation report reiterated moderate price pressures, bolstering bets on an interest rate cut at the upcoming US Federal Reserve meeting in September.
The Personal Consumption Expenditure index, the central bank's preferred measure of inflation, rose 2.5% in July on a year-on-year basis, compared with an average of 2.6%, according to economists polled by Reuters. On a monthly basis, it increased by 0.2% as expected.
Among ratio-sensitive megacaps, Amazon.com (NASDAQ: ) and Microsoft (NASDAQ: ) gained 1.3% and 0.7%, respectively. Chip stocks rise; Broadcom (NASDAQ: ) added 3.4% and Advanced Micro Devices (NASDAQ: ) rose 1.4%, helping a 2.2% gain.
Friday's PCE report is the last before the Fed's September meeting and follows comments from Chairman Jerome Powell last week expressing support for an imminent policy adjustment.
“Powell's speech in Jackson Hole repeated several times that we are getting closer to our goal. There is nothing here that will make me change anything,” said Andre Bakhos, a managing member at Ingenium Analytics.
“We still have the jobs report coming out next Friday, which is a big concern for us.”
The odds of a 25-bps cut stood at 69.5%, according to CME Group's (NASDAQ: ) FedWatch tool, while those of a 50-bps cut were at 30.5%.
Global markets are set to end a turbulent month in risk assets, after signs of a sudden slowdown in the labor market sparked fears of a faster-than-expected slowdown in the world's largest economy in early August. The influence of the Japanese yen trade made the situation worse.
Risk-taking has improved since then, with the Dow near a record high and on track for monthly gains, as subsequent data including Thursday's upward revision to economic growth eased investor nerves.
At 09:44 a.m. the rose gained 114.66 points, or 0.28%, to 41,449.71, which gained 36.45 points, or 0.65%, to 5,628.41 and which gained 156.25 points, or 0.89%, to 168,672.
Ten of the 11 S&P 500 sectors advanced, led by a 1% rise in technology stocks.
The technology-focused Nasdaq and S&P 500 closed lower Thursday after Nvidia (NASDAQ: The AI-chip bellwether rose 1.7% after falling 6.4% in the previous session.
The S&P 500 is near record highs, poised for a monthly gain of 1.8%, while the Nasdaq rose 0.3% in August.
Marvell (NASDAQ: ) Technology jumped 6.3% after forecasting third-quarter results that topped estimates.
Ulta Beauty (NASDAQ: ) fell 4.4% after cutting its full-year earnings forecasts.
Intel (NASDAQ: ) rose 5.9% following a report that it was exploring options that could include a merger or split.
Dell Technologies (NYSE: ) advanced 2.5% after raising annual revenue and profit forecasts.
Trading volumes are expected to be light ahead of the extended weekend due to the Labor Day holiday.
Advancing issues outnumbered decliners by a ratio of 3.15-to-1 on the NYSE, and by a ratio of 2.43-to-1 on the Nasdaq.
The S&P 500 posted a new 52-week high and one new low, while the Nasdaq Composite recorded 40 new highs and 20 new lows.
