Stocks Climb on Fed Rate Cut Expectations

U.S. stocks gained slightly as market participants anticipate a Federal Reserve interest rate cut. Investors are dissecting economic data and news of potential policy changes, amid beneficial impacts on small-cap stocks and strategic corporate acquisitions, with communication services sectors performing strongly.

U.S. stocks posted modest gains on Friday, fueled by expectations of a Federal Reserve interest rate cut in the coming week. As the backlog of economic data from the 43-day government shutdown is processed, investors are analyzing available indicators to assess economic health.

Consumer spending rose in September, aligning with economist forecasts, while the PCE Price Index confirmed inflation within anticipated parameters. Sentiment improved, leading to an 87.2% market pricing chance for a quarter-point rate reduction at the upcoming Fed meeting.

The S&P 500, Nasdaq, and Dow Jones all recorded weekly advances. Warner Bros Discovery shares soared post Netflix acquisition, while healthcare faced declines after changes to vaccine advisory. Small-cap stocks rallied, boosted by expectations for lower rates, and Ulta Beauty projected increased sales and profits.

(With inputs from agencies.)