By Noel Randewich
(Reuters) – Wall Street stocks saw an uptick, with the Dow achieving a second consecutive all-time closing high on Friday. Tesla and Amazon both climbed as fresh U.S. economic data heightened expectations of a modest interest rate cut by the Federal Reserve in September.
In July, U.S. consumer spending showed a solid increase, indicating a strong economy with moderate price rises.
“Investors are interpreting this as another indication of a soft landing,” said Cameron Dawson, chief investment officer at Newedge Wealth. “It’s another one of those Goldilocks kind of reports, perfectly balancing growth and inflation. The market is getting exactly what it desired.”
A Goldilocks economy signifies steady growth without excessive inflation.
Amazon.com and Tesla each saw a rise of over 3%. Broadcom surged nearly 4%, while Marvell Technology jumped 9% after forecasting quarterly results above estimates.
The personal consumption expenditures report was released on Friday, following Fed Chair Jerome Powell’s recent indication of a forthcoming policy adjustment.
Next week’s economic data includes the Labor Department’s August jobs report set for Friday.
Money markets indicate that traders mostly anticipate a 25 basis point rate cut by the Fed in September, with the likelihood of a 50 basis point cut diminishing after Friday’s data, as per CME Group’s FedWatch Tool.
Friday marked the end of a turbulent month on Wall Street, which began with concerns of a U.S. recession following signs of a sudden moderation in the labor market in early August. The impact of the Japanese yen carry trade exacerbated the market decline.
Stocks have rebounded since then, with major indices trading near record highs.
Prior to the U.S. stock market holiday for Labor Day on Monday, trading volume on U.S. exchanges was relatively light, with 11.2 billion shares traded, compared to an average of 11.4 billion shares over the previous 20 sessions.
The S&P 500 closed at 5,648.40 points, up by 1.01%. The Dow Jones Industrial Average rose 1.13% to 17,713.62 points, while the Nasdaq Composite gained 0.55% to 41,563.08 points.
All 11 S&P 500 sector indexes saw gains, with consumer discretionary leading the way with a 1.9% increase, followed by industrials with a 1.1% rise.
For the month, the S&P 500 climbed 2.3%, the Dow added 1.8%, and the Nasdaq rose 0.6%.
Nvidia rebounded by 1.5% after a 6.4% drop on Thursday, following results that failed to meet high investor expectations despite a positive outlook.
Novavax surged 8.6% after the FDA granted emergency use authorization for an updated version of its COVID vaccine.
Ulta Beauty slid 4% after revising its annual forecasts downwards, citing slowing demand for higher-priced cosmetics and fragrances.
Intel jumped nearly 10% amid reports of exploring options that may include a merger. Dell Technologies advanced 4.3% after raising its annual revenue and profit forecasts.
Shares of Trump Media & Technology Group, majority-owned by former U.S. President Donald Trump, dropped 1.7% to a record low, with its market value at $3.9 billion.
Advancing issues outnumbered falling ones within the S&P 500 by a 6.6-to-one ratio.
The S&P 500 registered 79 new highs and two new lows, while the Nasdaq recorded 84 new highs and 77 new lows.