The Dow Jones Industrial Average rose more than 400 points on Friday, approaching an all-time high, as investors reassessed the possibility of further interest rate cuts by the Federal Reserve next week.
The Dow Jones Industrial Average rose 379 points, or 0.9%, to 41,476 in recent trading. It closed at a record high of 41,563.08 on Aug. 30.
The S&P 500 rose 0.6%, while the Nasdaq also added 0.6%, both on track for a fifth straight day of gains.
Traders' expectations of a 50 basis point cut have soared overnight, from 14% on Thursday to 47% now. CME's FedWatch Tool showed.
Former New York Fed President Bill Dudley said there was a strong case for a 50 basis point rate cut. Other media reports describing the decision as a “last-minute call” added to the uncertainty.
“Several articles in the Wall Street Journal and Financial Times suggesting a 50 basis point rate hike is still feasible has once again caused the market to reassess expectations,” Deutsche Bank analysts said.
Expectations that the Fed will stick to its modest 25 basis point rate cut strengthened on Thursday after the producer price index rose slightly following the August consumer price index.
“The market is hoping the FOMC will ease quickly and continue to fight recession risks. The meeting is a high-risk event and risks will remain regardless of 25 or 50 bps of easing next week,” said Bob Savage, head of market strategy and insights at BNY Mellon.
All major U.S. stock indexes rose in the previous trading day, boosted by gains in large-cap stocks, extending their weekly upward trajectory.
Meanwhile, the University of Michigan's preliminary consumer confidence index for September came in at 69, beating analyst expectations of 68.5.
Among individual stocks, Boeing rose 2.6% after workers at its West Coast factories went on strike early Friday after overwhelmingly refusing to negotiate their contracts.
Adobe fell 9% after its fourth-quarter profit fell short of analysts' expectations, while cloud-computing company Oracle rose 2.7% after it raised its fiscal 2026 revenue outlook.
Chinese e-commerce company PDD Holdings fell 2.4% after the Biden administration said it would take steps to curb duty-free imports of low-value goods into the US below a “de minimis” threshold of $800.
Ride-hailing platform Uber rose 5.7% after it said it was partnering with Alphabet Inc's Waymo to bring self-driving ride-hailing services to Austin and Atlanta, Texas.
