Nasdaq Closes at Record High on Hopes for September Rate Cuts | Wall Street Today
Stocks rose Friday as data revealed that American consumers have lowered their inflation expectations, boosting optimism about potential Federal Reserve rate cuts this year.
Goldman Sachs economists now predict the Federal Reserve will cut interest rates in September, rather than July. However, traders are now pricing in less than a 50% chance the central bank will cut rates at its September meeting, according to the CME FedWatch Tool.
The $S&P 500 Index(.SPX.US$ was up 0.7%. The tech-heavy $Nasdaq Composite Index(.IXIC.US$ was the outperformer, with a gain of 1.1%, closing at a record high. Meanwhile, the $Dow Jones Industrial Average(.DJI.US$ was unchanged, up 0.01%.
MACRO
A monthly measure of U.S. consumer sentiment dropped to its lowest point in six months in May due to expectations of higher inflation, according to a survey released on Friday.
Consumers expect prices will climb at a 3.3% annual rate over the next year, down from the 3.5% that was expected earlier in the month, University of Michigan data showed Friday.
Meantime, Fed Gov. Christopher Waller said he still thinks the neutral interest rate is relatively low, though he warned that unsustainable fiscal spending could alter that trend.
SECTORS
Oil prices remained near a three-month low as traders considered lower geopolitical risks and signs that the global market has enough supply ahead of next month's OPEC+ meeting.
Both Brent and West Texas Intermediate futures closed higher on Friday, but they still posted weekly declines of over 2%, hovering near their lowest prices since February.
MOOVERS
$Intuit(INTU.US$ stock sank 8.3% Friday as markets digested a decline in users for TurboTax and the company's disappointing guidance.
Shares of $AMC Entertainment(AMC.US$ and $GameStop(GME.US$ were rallying in Friday trading after registering their biggest declines in a week during Thursday's session.
AMC shares surged 7.7%. GameStop shares jumped nearly 6%.
$Workday(WDAY.US$ stock plunged 15.6% following the software company reduced its fiscal-year outlook for subscription revenue on Thursday, signaling lower customer headcount growth in its first quarter.
Shares of $Deckers Outdoor(DECK.US$ rose 13.4% after the company posted fiscal fourth-quarter earnings that easily beat estimates and said it expects revenue in fiscal 2025 to jump about 10% to $4.7 billion.
$Spirit Airlines(SAVE.US$ on Friday said it would open a new crew base for pilots at Newark Liberty International Airport in September. The stock rose 3% on Friday.
Source: Bloomberg, MarketWatch
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