Stock Market Update: S&P 500 Gains as Fed Rate Cut Expectations Rise

Key Takeaways

• The S&P 500 advanced 0.5% on Friday, Sept. 13, 2024, amid growing expectations of a steeper rate cut by the Federal Reserve next week.
• Shares of online retailer Etsy jumped as the Biden administration proposed new rules to limit tariff exemptions that often benefit Chinese e-commerce companies.
• Adobe shares tumbled after the software giant issued a weaker-than-expected sales forecast for the current quarter.

Major U.S. equities indexes climbed Friday to wrap up a week of gains as recent data on inflation and the jobs market helped lift expectations that the Federal Reserve could be set for a steeper interest rate cut at its meeting next week. The S&P 500 advanced 0.5% Friday, while the Dow and the Nasdaq both closed around 0.7% higher.

Warner Bros. Discovery Surges on Distribution Deal Renewal

Warner Bros. Discovery (WBD) shares notched the top performance of any S&P 500 stock for the second straight day, surging 10.8% on Friday. The entertainment giant said Thursday that it renewed its distribution deal with Charter Communications (CHTR), a year before the existing agreement was set to expire.

Etsy Bounces Back on Proposed Tariff Limitations

Shares of online crafts marketplace Etsy (ETSY) jumped 7.6% on the day, bouncing off a 52-week low set by the stock in intraday trading earlier in the week. A proposal by the Biden administration to limit tariff exemptions that often benefit Chinese e-commerce companies helped push Etsy shares higher.

Align Technology Receives Positive Rating

Align Technology (ALGN) shares added 6.5% on Friday as Piper Sandler reiterated its “overweight” rating for shares of the provider of clear teeth aligners and other dental products. Analysts pointed to strong trends in the U.S. orthodontics market over recent months that could drive strong quarterly results.

Adobe Disappoints with Sales Forecast

Adobe (ADBE) shares dropped 8.5%, the biggest daily decline in the S&P 500, following the release of the software firm’s results for its fiscal third quarter. Although sales and profits grew from a year ago and exceeded analysts’ forecasts, Adobe’s fourth-quarter sales guidance came in below expectations.

Garmin Downgraded on Valuation Concerns

Shares of GPS navigation and wearable technology provider Garmin (GRMN) slid 5.1% after the investment bank Barclays downgraded the stock to “underweight” and reduced its price target. Analysts suggested Garmin’s valuation has become overextended following a year of strong gains for the stock. Barclays analysts also said Garmin could see softer sales in the second half of the year.

Boeing Workers Go on Strike

Boeing (BA) shares fell 3.7% as thousands of workers for the aviation giant went on strike Friday. The first strike at the company in more than 16 years began after workers voted overwhelmingly to reject a contract deal. The labor dispute could complicate Boeing’s efforts to stabilize its supply chains and resolve production issues after a series of safety incidents.

Overall, the stock market ended the week on a positive note, with the S&P 500 and other major indexes posting gains. Investors are eagerly awaiting the Federal Reserve’s decision on interest rates, with expectations of a steeper rate cut fueling optimism in the market. However, not all stocks fared well, as Adobe’s weaker sales forecast and Garmin’s valuation concerns led to significant declines in their share prices. The ongoing labor dispute at Boeing also adds uncertainty to the company’s future prospects.

Disclaimer: The information provided here is for informational purposes only and should not be considered as investment advice. Investing in the stock market involves risk, and individuals should carefully consider their investment objectives and risk tolerance before making any investment decisions.

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