The technology-heavy Nasdaq slipped for the day while the S&P 500 was slightly lower, but both indexes held near recent record highs.
“The market at this point..(is) very much pricing in a soft landing, and pricing in that we’ve beaten inflation, and the Fed will be able to cut rates without hurting the economy,” it said. Liz Young Thomas, head of investment strategy at SoFi in New York.
The Commerce Department reported modest increases in consumer spending while inflationary pressures continued to ease. Separately, the University of Michigan’s final September reading on consumer sentiment came in at 70.1, beating economists’ expectations of 69.3, according to a Reuters poll.
The Dow Jones Industrial Average rose 137.89 points, or 0.33%, to 42,313.00, the S&P 500 lost 7.20 points, or 0.13%, to 5,738.17 and the Nasdaq Composite lost 70.70%, or 1919.53 points, to 1,919.53.
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The Russell 2000 index, which tracks small caps that fare better in a low-rate environment, rose 0.67% to a one-week high.
Shares of Nvidia fell 2.17%, weighing on the technology-heavy Nasdaq.
According to CME Group’s FedWatch tool, investors now favor a 50-basis-point cut at the Fed’s next meeting with a 52.1% chance, above the coin toss before the data.
Cooling price pressures prompted the Fed to cut rates by 50 bps last week. Focus will now shift to several labor market reports due next week.
Among individual stocks, Bristol-Myers Squibb added 1.58% after the US FDA approved its schizophrenia drug.
Costco Wholesale lost 1.76% after fourth-quarter revenue fell.
US-listed shares of Chinese companies such as Alibaba rose 2.15%, PDD Holdings gained 4.67% and NetEase gained 2.65% after China’s central bank cut interest rates and injected liquidity into the banking system.
The optimism extended to miners, with Arcadium up 2.13%, and US-listed shares of BHP also added 1.81%.
Lead issues outperformed decliners by a 1.82-to-1 ratio on the NYSE. There were 605 new highs and 31 new lows on the NYSE.
The S&P 500 posted 42 new 52-week highs and no new lows while the Nasdaq Composite posted 74 new highs and 65 new lows.
Volume on US exchanges was 11.50 billion shares compared to the full session average of 11.87 billion over the last 20 trading days.
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