Tech Stocks Cushion S&P 500 as Fed Eyes Interest Rate Cuts

The S&P 500 ended its four-day run of record highs, slightly declining due to poor consumer sentiment data and a moderated economic outlook from the Federal Reserve. However, gains in technology shares, particularly Adobe's, helped cushion the decline. Fed policymakers are cautious about cutting interest rates, awaiting sustained inflation reduction.

The S&P 500 edged lower on Friday, ending a four-day run of record closing highs, but gains in Adobe and other technology shares limited the decline.

The S&P 500 technology sector rose, with Adobe shares jumping after the company raised its annual revenue forecast on more demand for its artificial intelligence-powered software. Investors were also digesting economic data to gauge how soon the Federal Reserve might be able to cut interest rates.

A preliminary reading of the University of Michigan's Consumer Sentiment Index slipped to 65.6 in June, sharply lower than expectations. On Wednesday, Fed policymakers dialed back their projections for three cuts this year to just one.

"The main situation here is we've got an extended market," said Adam Sarhan, chief executive of 50 Park Investments in New York. "You've had a big rally this week, led by big-cap tech. Under the surface, we have a lot of areas acting weak." According to preliminary data, the S&P 500 lost 1.48 points, or 0.03%, to end at 5,432.26 points, while the Nasdaq Composite gained 24.20 points, or 0.14%, to 17,688.88. The Dow Jones Industrial Average fell 57.50 points, or 0.14%, to 38,591.49.

The Russell small-cap index fell. Fed Bank of Chicago President Austan Goolsbee said he was

relieved after data this week showed inflation in May had cooled, but he would still like to see "more months" of similar data before cutting interest rates.

Nvidia shares also were higher. (Additional reporting by Lisa Mattackal and Johann M Cherian in Bengaluru; Editing by Maju Samuel and Richard Chang)