Stocks demonstrated volatility throughout Friday’s trading session before closing with significant gains. The Dow achieved its fifth increase in the last six sessions, marking a new record closing high.As trading concluded, the major indices reached session highs. The Nasdaq soared by 197.19 points, or 1.1%, closing at 17,713.62. The S&P 500 gained 56.44 points, or 1.0%, ending at 5,648.40, and the Dow added 228.03 points, or 0.6%, to finish at 41,563.08.For the week, however, the major averages showed mixed results. The Nasdaq fell by 0.9%, while the S&P 500 edged up by 0.2%, and the Dow advanced by 0.9%.The uplift on Wall Street followed the release of U.S. consumer price inflation data from the Commerce Department, which aligns with the Federal Reserve’s preferred metrics.The report indicated that consumer prices increased in July as forecasted, with the annual rate of price growth remaining unexpectedly stable.According to the report, the personal consumption expenditures (PCE) price index rose by 0.2% in July, following a 0.1% increase in June, in line with expectations.The core PCE price index, which excludes food and energy, also increased by 0.2% in July. This uptick matched both the previous month’s increase and economists’ estimates.The annual growth rates for the PCE price index and the core PCE price index remained unchanged at 2.5% and 2.6%, respectively.While analysts had anticipated a 0.1 percentage point increase in year-over-year growth for both indexes, the stability has fueled expectations of an interest rate cut by the Fed next month. Nevertheless, market volatility arose from uncertainty regarding the pace of future rate cuts.Based on CME Group’s FedWatch Tool, there is a 69.5% probability of a quarter-point rate cut next month, versus a 30.5% probability of a half-point rate cut.Some analysts, like Harris Financial Group’s managing partner Jamie Cox, argue against the need for a 50 basis point rate cut.However, James Knightley, Chief International Economist at ING, remarked, “A soft jobs report next week could still tip the odds in favor of a 50bp rate cut.”Sector NewsSemiconductor stocks saw a significant rise, with the Philadelphia Semiconductor Index climbing by 2.6%.Intel (INTC) was a major contributor, surging by 9.5% after Bloomberg reported that the company is exploring options with investment bankers, including potentially splitting its product-design and manufacturing units.Marvell Technology (MRVL) also performed well, jumping 9.2% after surpassing fiscal second-quarter expectations.The retail sector showed robust gains as well, with the Dow Jones U.S. Retail Index rising by 1.7%.Noteworthy gains were also observed in the computer hardware, banking, and housing sectors, which outperformed in tandem with most other major sectors.Other MarketsIn international markets, Asia-Pacific stock exchanges mostly moved higher on Friday. Japan’s Nikkei 225 Index rose by 0.7%, while Hong Kong’s Hang Seng Index increased by 1.1%.European markets, in contrast, closed with slight declines. The French CAC 40 Index edged down by 0.1%, while the U.K.’s FTSE 100 Index and Germany’s DAX Index both hovered just below the unchanged line.On the bond market front, treasuries faced pressure throughout the session after a stagnant start. Consequently, the yield on the benchmark ten-year note climbed 4.4 basis points to 3.911%.Looking AheadPost-Labor Day, the upcoming week is expected to focus on the monthly jobs report. Additionally, reports on manufacturing and service sector activity, along with the Federal Reserve’s Beige Book, are likely to garner significant attention.The material has been provided by InstaForex Company – www.instaforex.com
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