Stocks Poised for Weekly Gains as Fed Rate Cut Looms

As the trading week draws to a close, stock futures are pointing to a slightly higher open on Friday, signaling that major indexes are set to post gains for the week. This recovery comes after an early-month selloff, with the S&P 500 and Nasdaq riding four-day winning streaks, buoyed by solid gains in technology stocks and expectations that the Federal Reserve will start cutting interest rates next week.

Navigating the Shifting Tides of the Market

Futures Point to Positive Start

Futures tied to the S&P 500 and Dow Jones Industrial Average are up 0.3% and 0.2%, respectively, while those linked to the Nasdaq 100 are flat. This suggests that the major indexes are poised to open higher, continuing the positive momentum that has been building throughout the week. Investors are closely watching the performance of large-cap technology stocks, which have been a driving force behind the recent market rally.

Technology Stocks in the Spotlight

In premarket trading, the performance of technology giants has been mixed. Apple, Alphabet, Amazon, and Broadcom are all gaining ground, while AI investor favorite Nvidia, Microsoft, and Meta Platforms are down. This divergence highlights the ongoing volatility and uncertainty in the tech sector, as investors navigate the shifting landscape of innovation and market trends.

Notable Movers and Shakers

Shares of Boeing are down more than 2% after the aircraft manufacturer's machinists overwhelmingly voted against a new contract and went on strike. This development underscores the challenges facing the aerospace industry as it navigates supply chain disruptions and labor negotiations. Meanwhile, Adobe's stock fell nearly 8% after the software maker issued a disappointing sales outlook, while Oracle gained 7% after the company boosted its sales guidance.

The Fed's Looming Rate Decision

The economic data calendar is relatively light on Friday, but investors are closely watching for any clues that could influence the Federal Reserve's decision on interest rates. The Fed is widely expected to cut its benchmark rate next Wednesday for the first time in four years, as inflation continues to moderate and the labor market weakens.While Fed officials have made clear that rate cuts are coming, the extent of those cuts remains uncertain. Market participants are now pricing in about a 47% chance that the Fed will cut the benchmark rate by half a percentage point next week, up from around 30% yesterday and 15% on Wednesday. A larger-than-expected rate cut could signal the Fed's concern about a significant deterioration of the economy.

Shifting Yields and Commodity Prices

The yield on 10-year Treasurys, which is closely correlated to expectations around interest rates, fell to 3.65% on Friday, from 3.68% late yesterday. This decline reflects the market's anticipation of the Fed's upcoming rate decision.In the commodity markets, gold futures were up 1% to a fresh record high above $2,600 an ounce, while crude oil futures were up more than 1%, extending a multi-day recovery after hitting their lowest point in more than a year earlier in the week. Bitcoin, meanwhile, was little changed at around $58,000.As investors navigate the shifting tides of the market, the upcoming Fed decision and the performance of key sectors will continue to be closely watched. The market's ability to maintain its positive momentum will be a crucial indicator of the overall health and resilience of the financial landscape.