Wall Street surges amid interest rate cut speculation; Adobe, Boeing move in focus

Wall Street’s major indexes rose Friday as investors reconsidered the likelihood of a significant interest rate cut by the Federal Reserve next week. Meanwhile, Photoshop maker Adobe fell sharply on lower fourth-quarter profit forecasts.

Overnight, the probability of a 50-basis-point rate cut rose from 14% to 43%, according to CME’s FedWatch tool. Former New York Fed President Bill Dudley had been calling for a bigger cut. Reports in major financial publications added to the existing uncertainty.

The Russell 2000 small-cap index performed particularly well, rising 2.2%, benefiting from a lower interest rate environment. Michael James of Wedbush Securities noted a shift toward long positions in U.S. stocks ahead of the Federal Reserve meeting.

All 11 S&P 500 sectors rose, led by materials stocks, which rose 1.2% on rising precious metals prices. Consumer sentiment looked better in September, although caution remained ahead of the November presidential election.

The Dow Jones, S&P 500 and Nasdaq Composite all neared two-week highs, each posting significant weekly gains. The Philadelphia SE Semiconductor Index also rose, reaching levels last seen in early September.

In terms of individual stock moves, Boeing narrowed losses after a labor strike, while Adobe fell 9.3% on disappointing forecasts. Uber posted gains after announcing autonomous ride-hailing initiatives with Waymo.

(Based on information from the agency.)