U.S. Stocks Consolidate Near Records as Fed Cut Bets Hold
U.S. stocks edged slightly lower on Friday after hitting record highs earlier this week. A mix of soft inflation data and a weakening labor market kept expectations for a Federal Reserve rate cut intact.
Wall Street Moves Lower
At 09:35 ET (13:35 GMT), the Dow Jones Industrial Average slipped 60 points, or 0.1%. The S&P 500 and the Nasdaq Composite also fell by 0.1% each.
Despite Friday’s dip, all three major indexes are still up about 1.6% for the week. The S&P 500 is on track for its best weekly gain since early August and its fifth positive week out of six. The Nasdaq is set for its second consecutive weekly rise, while the Dow is poised for its first weekly win in three.
Fed Rate Cut Expectations
Thursday’s data showed U.S. consumer prices rose slightly faster than forecast. At the same time, weekly jobless claims jumped to 263,000, the highest since 2021, signaling a cooling labor market.
Traders now see almost certain odds of a 25 basis point rate cut at the Fed’s Sept. 16–17 meeting. A few still expect a larger half-point reduction.
Analysts at ING noted that inflation pressures remain due to tariffs but argued that the weak jobs market is now the Fed’s top concern. Investors will also watch the University of Michigan surveys later Friday for clues on inflation expectations.
Global Fund Outflows
Global equity funds saw their first weekly outflow in five weeks as investors booked profits. According to LSEG Lipper, investors pulled $3.06 billion from equity funds in the week ending Sept. 10.
The outflow was driven by U.S. equity funds, which lost $10.44 billion, their worst in five weeks. By contrast, European funds gained $3.77 billion and Asian funds drew $1.87 billion.
Corporate Highlights
Adobe (NASDAQ: ADBE) raised its annual outlook thanks to strong demand for its AI-powered design tools like Photoshop and Premiere Pro.
RH (NYSE: RH) posted weaker quarterly revenue, while Super Micro Computer (NASDAQ: SMCI) announced shipments of its new Nvidia-powered AI servers.
Microsoft (NASDAQ: MSFT) and OpenAI revealed a non-binding agreement on OpenAI’s transition to a for-profit model.
Meanwhile, several IPOs are set to debut Friday, including Gemini Space Station (led by the Winklevoss twins), Black Rock Coffee Bar, Via Transportation, and Legence.
Oil Prices Rebound
Crude prices jumped on Friday after sharp losses earlier in the week. At 09:35 ET, Brent futures rose 1.6% to $67.40 a barrel, while WTI futures climbed 1.4% to $63.24. Both contracts are up between 2% and 3% for the week.
Oil gained support from U.S. pressure on India and China to cut Russian oil purchases. The market also reacted to a drone strike on Russia’s Primorsk oil terminal, which temporarily halted exports.
Still, supply risks remain. The EIA reported a 3.9 million-barrel build in U.S. crude stocks last week, while the IEA said global oil output is expected to rise faster this year due to OPEC+ supply growth.
