Sept 13 (Askume) – Wall Street’s main indexes climbed on Friday as investors reevaluated the prospect of a sharp interest rate cut by the Federal Reserve next week, while Photoshop maker Adobe fell after it reported fourth-quarter profit that fell short of expectations.
Traders’ expectations for a 50 basis point rate cut rose overnight and now stands at 43%, compared with 14% on Thursday, according to CME Group’s FedWatch tool.
Bill Dudley, former president of the Federal Reserve Bank of New York, said there was good reason to cut interest rates by 50 basis points. Other media reports said the decision was “a close call”, adding to the uncertainty.
“Several articles published by the Wall Street Journal and the Financial Times suggested that a 50 basis point rate hike was still possible, causing the market to re-evaluate its expectations,” the Deutsche Bank analyst said.
The Russell 2000 Small-Cap Index (.RUT) , which benefited from a low interest rate environment, outperformed the market and rose 2.2%.
Michael James, managing director of equity trading at Wedbush Securities, said the US stock market situation has improved in the past three days, with investors expecting much more to go before the Fed meeting.
On Thursday, the prospect of a modest 25 basis point interest rate cut by the Federal Reserve increased after August consumer price data showed a slight increase in producer prices .
All 11 S&P 500 sectors were higher on Friday, with materials (SPLRCM) gaining 1.2% as precious metals prices rose .
Meanwhile, a survey showed US consumer confidence improved in September as inflation fell , though Americans remained cautious ahead of the November presidential election.
All three major US benchmarks were near two-week highs and on track for solid weekly gains.
The Dow Jones Industrial Average (.DJI) rose 343.71 points, or 0.84%, to 41,440.48; the S&P 500 index ( .SPX) rose 31.29 points, or 0.56%, to 5,627.15, it rose 112.80 points, or 0.84%, to 17,682.47.
The Philadelphia SE Semiconductor Index (.SOX) rose 1.4% to a level last seen on Sept. 2, with most chip stocks leading the gains.
Among companies that moved separately, Boeing Co (BA.N) cut its losses and was down 0.5% as workers at its U.S. West Coast plants laid off workers.The vast majority rejected the contractual agreement.
Adobe (ADBE.O) fell 9.3% to a one-month low after its fourth-quarter profit missed analysts’ expectations , while Oracle (ORCL.N) rose 2.7%.
Chinese e-commerce company Pinduoduo PDD.O fell 2.3% after the Biden administration said it would restrict the import of low-value goods into the United States under a “minimum” threshold of $800 .
Uber (UBER.N) rose 4.9% after the ride-hailing platform said it will partner with Alphabet Inc’s Waymo to provide self-driving rides in Austin, Texas, and Atlanta .
Advancing issues outnumbered declining ones on the NYSE by a 6.71-to-1 ratio, and on the Nasdaq, a 3.62-to-1 ratio favored advancing issues.
The S&P 500 hit 50 new 52-week highs and no new lows; the Nasdaq Composite hit 87 new highs and 36 new lows.
