US stocks gained ground Friday, posting strong weekly wins after Wall Street's expectations for a jumbo interest rate cut by the Federal Reserve shot up suddenly.
The S&P 500 (^GSPC) rose 0.5% while the tech-heavy Nasdaq Composite (^IXIC) climbed 0.7%, registering a fifth day of gains for both gauges amid a comeback for tech stocks. The Dow Jones Industrial Average (^DJI) added 0.5% or about 300 points.
For the week, the Nasdaq gained more than 5%, posting its best week of the year. The S&P increased 4% and the Dow put on 2%. The gains of the major indexes come as Wall Street has been rattled by recent volatility but the rapid rebounds have come amid heightened debate around interest rate policy.
Stocks are rising as the market warms once again to the likelihood of a half-point rate cut by the Fed after virtually writing off the chances of a big pivot in light of recent inflation and jobs data. Traders are now pricing in a 49% chance of a 50 basis point move next week, compared with 15% at one point on Thursday.
The yield on the benchmark 10-year Treasury (^TNX) slipped Friday, down 2 basis points at around 3.6%.
Markets have been whipsawed in recent days by shifting speculation over whether the Fed will opt for a cut of a quarter point or a half point when it makes its expected first rate cut this cycle. Concerns about a labor market slowdown and the risk of a recession have helped feed that volatility — which Wall Street believes could persist if a 0.5% cut comes in.
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Hamza Shaban
Stocks post big weekly wins ahead of Fed decision
US stocks gained ground Friday, posting strong weekly wins after Wall Street's expectations for a jumbo interest rate cut by the Federal Reserve shot up suddenly.
The S&P 500 (^GSPC) rose 0.5% while the tech-heavy Nasdaq Composite (^IXIC) climbed 0.7%, registering a fifth day of gains for both gauges amid a comeback for tech stocks. The Dow Jones Industrial Average (^DJI) added 0.5% or about 300 points.
Hamza Shaban
Trump Media stock rises after Trump says he won't sell shares
Near the end of a press conference near Los Angeles on Friday afternoon, Donald Trump was asked about the waning shares of his social media company and whether he’s selling his shares.
No, he quickly promised. He wasn't selling, reports Yahoo Finance's Ben Werschkul.
The comment immediately pushing up shares in Trump Media & Technology Group (DJT) by 10% at one point Friday afternoon. DJT is the publicly traded parent company behind Truth Social.
“I'm not leaving, I love it,” he told reporters during an answer where he repeatedly reiterated what he says are his plans to both stay posting on his Truth Social account and also keep possession of his shares.
Trump has been subject to a lockup period on his stake in the company but that ends next week, on Sept. 19, when the GOP nominee could potentially begin to sell. In unwinding his position, Trump would gain access to what could be a multibillion-dollar windfall — but it's a fallout that is nevertheless down over 70% from it’s peak earlier in the election season.
“A lot of people think I'm going,” he said at another point, saying Elon Musk, who has endorsed Trump, would love to see him switch over completely to X, but he plans to stay where he is.
Hamza Shaban
A look at the week ahead
A hugely important Fed meeting is only days away, marking a significant policy shift and an official end to a years-long tightening campaign designed to tamp down inflation.
What has been months in the making is now only days away. And while the central bank is widely expected to begin cutting rates at the end of their policy huddle on Wednesday, what's less certain is the size of the cut.
Market bets are now roughly split on whether the Fed will ease rates by a more drastic 50 basis points or by 25 basis points. The more severe cut would come in an effort to protect a weakening labor market and minimize the risks of a recession, but would also risk spooking the stock market and signaling a more serious downturn.
On the corporate front, only a handful of companies are set to report earnings, including FedEx (FDX), General Mills (GIS), and Darden (DRI).
Yahoo Finance's Brent Sanchez has a graphical breakdown of what to watch next week:
Hamza Shaban
The case for a bigger Fed rate cut
"We believe what the Fed should do next week is clear: recalibrate the policy rate 50bp lower to adjust for the shifting balance of risks," wrote JPMorgan analyst Michael Feroli in a preview note on Friday.
Friday saw a rise in expectations for a jumbo rate cut by central bankers, according to the CME FedWatch Tool, following reports by the Financial Times and the Wall Street Journal that policymakers were struggling to come to a decision. Investors now place a roughly 49% probability on a 50 basis point cut at the Fed's meeting next week, compared with 15% at one point on Thursday.
Feroli said the Fed should "front-load" its rate cuts since it will take almost a year to get back to the right interest rate policy if central bankers ease rates by 25 basis points each time. In addition, Feroli wrote, "With hindsight, it might have been appropriate to start the cycle in late July."
Still, as Yahoo Finance's Josh Schafer reports, there are reasons for the Fed to pursue a more moderate approach, primarily for the dire signal a 50 basis point cut might send to Wall Street.
But Feroli has a response to this line of thinking.
"The Committee may be worried about sending an overly worried message about the outlook. Powell has proven himself to be an adept communicator and we believe he can convey that a level shift lower in rates is intended to reinforce their forecast for a soft landing."
Hamza Shaban
Stocks trending in afternoon trading
Here are some of the stocks leading Yahoo Finance’s trending tickers page during afternoon trading on Friday:
Boeing (BA) Shares of the planemaker pulled back as factory workers walked out on strike, halting manufacturing across the company's Seattle hub, its largest. The credit rating agency Fitch said Friday that an extended work stoppage could pose a risk of a credit rating downgrade and affect the Boeing's operations.
Adobe (ADBE): The software company sank in afternoon trading after disclosing an outlook that failed to show an uplift from its AI push. Shares slipped nearly 9%.
RH (RH): Shares of the furniture retailer surged more than 20% Friday afternoon, building on momentum from Thursday when the company reported revenue and earnings that topped estimates.
Oracle (ORCL): The database software and cloud company rose 1% after boosting its fiscal 2026 forecast and announcing that it expects sales in fiscal 2029 to top $104 billion.
Hamza Shaban
Boeing strike could risk credit rating downgrade
As Boeing's West Coast factory workers initiated a strike on Friday, Fitch said that an extended work stoppage could pose a risk of a credit rating downgrade and affect the planemaker's operations.
Boeing shares fell almost 4% in afternoon trading Friday as factory workers began a strike for the first time in 16 years, following a vote of its largest union to reject a contract offer for workers of the company's Seattle hub.
The labor dispute comes as Boeing is still reeling from heightened regulatory scrutiny after a high-profile January incident in which a door panel of a 737 MAX jet detached mid-flight.
If the strike continues beyond several weeks, Fitch said Boeing's management would likely need to find new sources of liquidity to stay within its cash targets and within the credit rating agency's levels before a potential downgrade, Reuters reported.
On the upside, if the parties resolve the strike before a two-week period, the labor action is unlikely to prompt a change in rating, Fitch said.
Hamza Shaban
Stocks pick up momentum in afternoon session
US stocks gained momentum on Friday afternoon as expectations of a larger cut from the Federal Reserve shot up to about 43%, according to the CME FedWatch tool.
The S&P 500 (^GSPC) and the tech-heavy Nasdaq Composite (^IXIC) climbed 0.7% to point to a fifth day of gains for both gauges amid a comeback for tech stocks. The Dow Jones Industrial Average (^DJI) also added 1% or more than 400 points.
Hamza Shaban
Bets rise on a bigger Fed rate cut next week
The mood on Wall Street has shifted as traders see a higher likelihood that the Fed will opt for a larger, half percentage point rate cut next week, shifting expectations that had previously settled around a more modest one-quarter cut.
During morning trading on Friday, the likelihood of a more severe cut of 50 basis points stood at 43%, while the chances of a more traditional 25 basis point reduction registered 57%, according to the CME FedWatch tool. The odds were closer to 50-50 earlier in the trading session, but the likelihood of a larger cut was still much higher on Friday compared to a day ago, when it was was 28%, and to the forecast a week ago of 30%.
Hamza Shaban
Consumer sentiment rises for second consecutive month
US consumers sentiment improved for the second straight month, reaching levels last seen in May and rising about 2% higher than last month's reading.
The first September report of the University of Michigan Consumer Sentiment Index showed a reading of 69, driven in part by the perception that prices are becoming more favorable to consumers. The commonly followed measure of consumer confidence in the US economy is far above the June 2022 low, which registered about 40% worse.
However, "Consumers remain guarded as the looming election continues to generate substantial uncertainty," said Joanne Hsu, surveys of consumers director, in a statement published Friday.
Inflation expectations for the year ahead also improved, continuing a four month trend of optimism that pricing pressures will cool, according to the report. The current reading of 2.7% is the lowest since December 2020, the report said, coming in a range that was seen in the years prior to the pandemic.
Longer-run expectations however, were little changed, ticking up to 3.1% from last month's 3%. They remain "modestly elevated" compared to the years before the pandemic, suggesting that consumer perceptions are are still impacted by the global health crisis and the inflation that followed in the aftermath.
Hamza Shaban
Stocks move higher as market bets move closer to a half-point Fed cut
US stocks edged higher on Friday, setting the stage for strong weekly wins after Wall Street's expectations for a more drastic interest rate cut by the Federal Reserve shot up overnight.
The S&P 500 (^GSPC) moved up about 0.2% while the tech-heavy Nasdaq Composite (^IXIC) climbed just over the flat line to point to a fifth day of gains for both gauges amid a comeback for tech stocks. The Dow Jones Industrial Average (^DJI) also added roughly 0.2%.
MILWAUKEE (AP) — Pete Alonso hit a go-ahead, three-run homer off closer Devin Williams in the ninth inning and the New York Mets beat the Milwaukee Brewers 4-2 on Thursday night to win their NL Wild Card Series.
Officers pursued a black Jetta onto Interstate 29, where it crashed into two other cars sitting in traffic. The occupants of the Jetta were wanted on suspicion of armed robbery and kidnapping, according to police.
STORY: :: Liz Cheney calls Trump’s actions on Jan 6 ‘depravity’ while campaigning with Harris:: October 3, 2024:: Ripon, Wisconsin“Donald Trump was willing to sacrifice our Capitol, to allow law enforcement officers to be beaten and brutalized in his name and to violate the law and the Constitution in order to seize power for himself. I don't care if you are a Democrat or a Republican or an independent, that is depravity and we must never become numb to it.”“I know that the most conservative of conservative values is fidelity to our Constitution. I tell you, I have never voted for a Democrat. But this year, I am proudly casting my vote for Vice President Kamala Harris.”Cheney and her father Dick Cheney, who was vice president under George W. Bush, are staunch conservatives and two of the most prominent Republicans to have endorsed Harris against Trump.Both have sharply criticized Trump, the Republican nominee, calling his refusal to accept his 2020 election loss and his role in the Jan. 6, 2021 attack on the U.S. Capitol disqualifying."I was a Republican even before Donald Trump started spray tanning," Cheney joked, describing herself as a Ronald Reagan conservative. "I am proudly casting my vote for Vice President Kamala Harris," she said, her first vote ever for a Democrat.The former House of Representatives member said she and Harris may disagree on some things but they are bound together by their duty to the Constitution. Harris will be a president "who will defend the rule of law," Cheney said.Cheney's comments could help Harris as she tries to court Republican and centrist voters ahead of the Nov. 5 election.
SEOUL, South Korea (AP) — North Korean leader Kim Jong Un threatened to use nuclear weapons and destroy South Korea permanently if provoked, state media reported Friday, after the South’s leader warned that Kim’s regime would collapse if he attempted to use nuclear arms.
Terry Francona has been hired to manage the Cincinnati Reds, returning to the major leagues a year after he stepped down in Cleveland because of health reasons.
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Israel has sworn it will retaliate for Iran's missile barrage on Tuesday, which involved more than 180 ballistic missiles and was largely thwarted by Israel's air defense systems. Below are some ways Israel, backed by the United States, could strike back. Some analysts believe Israel is most likely to respond by targeting Iranian military installations, especially those that produce ballistic missiles like the ones used in Tuesday's attacks.
In Winnipeg, an Indigenous man sent to prison 50 years ago has finally won his case. Clarence Woodhouse always maintained his innocence and on Thursday, Manitoba’s chief justice acquitted him of a decades-old murder and apologized for the many failures that led to the 72-year-old’s wrongful conviction. Melissa Ridgen has more.
President Joe Biden said on Thursday he did not believe there is going to be an "all-out war" in the Middle East, a region that has been on edge amid Israel's assaults in Gaza and Lebanon and escalation of the U.S. ally's tensions with Iran. Tensions between Iran and Israel have been high as Israel has been weighing options to respond to Tehran's ballistic missile attack on Tuesday, which Iran had carried out in response to Israel's military action in Lebanon.
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