U.S. stocks rose on Friday as investors awaited comments from Federal Reserve officials for more clarity on the path of U.S. monetary policy after economic data this week supported bets on interest rate cuts.
Wall Street indexes are nearing record highs after last month’s sell-off, while a slew of economic data pointed to a cooling U.S. job market, raising expectations that the Fed will cut borrowing costs more than once this month. year.
A much better-than-expected earnings season also helped put the benchmark S&P 500 index and Nasdaq Composite back on track for a third straight week of gains.
The Dow Jones rose for an eighth straight session, its longest streak of daily gains since December, and is headed for a fourth week of gains.
The blue chip index also approached the 40,000 point level for the first time.
“This is the classic point where bad news is good news, because the jobs data over the last couple of weeks was what the Fed was finally looking for,” said Hugh Anderson, managing director at HighTower Advisors.
“Of course this is not good for job seekers, but it creates an optimistic environment for the market because they are now looking for interest rate cuts.”
According to LSEG’s probability tool, traders currently expect rate cuts of 45 basis points by the end of 2024, with the first 25 basis points expected in September.
Although most Fed officials have reiterated that the next move will be a rate cut, there are still questions about when easing will begin.
There is “considerable” uncertainty about the direction U.S. inflation will take in the coming months, San Francisco Fed President Mary Daly said Thursday.
Speeches from a series of Fed officials: Minneapolis President Neel Kashkari; Dallas President Lorie Logan; and Vice President of Supervision Michael Barr could offer further clues to the trajectory of interest rates.
The Dow Jones rose 0.33% to 39,517.40 points. The S&P 500 rose 0.31% to 5,230.45 points, while the Nasdaq Composite rose 0.34% to 16,401.91 points.
Source: Terra
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