U.S. stocks rose further on Friday, finishing with their best week this year and rising to a record high.
The Standard & Poor’s 500 rose 0.5 percent for its fifth straight gain and remains just 0.7 percent below its all-time high set in July, helped by gains in Microsoft Corp., Broadcom Inc. and other big technology stocks that helped it claw back nearly all of last week’s losses, its worst in about 18 months.
The Dow Jones Industrial Average rose 0.7%, briefly coming within 30 points of the record it set last month, while the Nasdaq Composite rose 0.7%.
Uber Technologies Inc. rose 6.4%, helping lift the market, after it said it would team up with Waymo to bring self-driving ride-hailing services to Austin, Texas and Atlanta early next year.
Stocks were also supported by the bond market, where Treasury yields fell ahead of next week’s Federal Reserve meeting. The unanimous expectation on Wall Street is that the Fed will cut interest rates on Wednesday for the first time in more than four years, rekindling hopes that the central bank will provide bigger stimulus than usual.
The Fed has been keeping its key interest rate at a 20-year high in hopes of slowing the economy enough to curb high inflation. Inflation has eased significantly from its peak in the summer two years ago, allowing the Fed to focus more on supporting the slowing job market and economy, it said.
How much to cut rates will be a delicate balancing act for the Fed, which would ease pressure on the economy but could also add fuel to inflation. Reports this week suggest some underlying upward pressure on inflation may remain, leading traders to initially scale back their expectations for the size of the Fed’s future policy.
But on Friday, traders considered the chances of the Fed cutting rates a lot bigger — a half-point instead of the usual quarter-point — to be roughly a coin toss, according to data from CME Group Inc. The federal funds rate has been hovering in the 5.25-5.50 percent range.
“The stock market is now converging on the size of the Fed’s rate cut next week and is probably OK with either,” said Samir Samana, senior global market strategist at Wells Fargo Investment Institute.
“They’re more concerned with direction than size, and lower interest rates should ease pressure on corporate costs and stock prices,” he said.
The yield on the 10-year Treasury note fell to 3.65% from 3.68% late Thursday. The yield on the two-year note, which more accurately reflects expectations of Fed action, fell even sharper, to 3.58% from 3.65%.
On Wall Street, home improvement company RH surged 25.5% after reporting better-than-expected profits and sales for its latest quarter. The company said demand was gaining momentum month-over-month “despite operating in the toughest housing market in the last 30 years.”
The housing market has been plagued by high mortgage rates, which have been easing since the spring on hopes of rate cuts. A flash reading of U.S. consumer sentiment on Friday beat economists’ expectations, but shoppers across the board are feeling the pinch as prices continue to rise across the economy.
Oracle edged up 0.4%, paring a big early gain after the company gave long-term financial guidance that beat analysts’ expectations. That gave the company a 14.3% gain for the week, which began with a better-than-expected profit report for its latest quarter.
Technology stocks were the main drivers of the market in general this week, especially Nvidia and other big tech stocks that struggled earlier this summer amid concerns they had become too expensive amid the artificial intelligence frenzy. Nvidia is up 15.8% this week despite falling 0.1% on Friday.
Boeing Co. was Wall Street’s biggest loser on Friday, dropping 3.7% after aircraft assembly workers lost their jobs after union members voted overwhelmingly to strike and reject a tentative contract that would have raised wages by 25% over four years at the struggling aerospace giant.
Adobe fell 8.5% even though the company also reported better-than-expected profits in its latest quarter. Analysts said investors were paying more attention to financial forecasts for the current quarter as some trends appear to be falling short of expectations.
Overall, the S&P 500 rose 30.26 points to 5,626.02, the Dow Jones Industrial Average rose 297.01 points to 41,393.78 and the Nasdaq Composite added 114.30 points to close at 17,683.98.
Overseas stock markets were mixed in Asia before indexes rose in Europe.
Cho is a contributing writer for The Associated Press. Associated Press writers Matt Ott and Zimo Zhong contributed to this report.
