Stocks advance modestly on rate-cut bets and mega-cap gains
Stocks advance modestly on rate-cut bets and mega-cap gains
The stock market posted modest gains this week as investors weighed a mix of corporate news, economic data, and increasingly cemented expectations for a September rate cut.
The S&P 500 rose 0.3%, while the Nasdaq Composite outperformed with a 1.1% gain, buoyed by strong performances in mega-cap technology names. The Dow Jones Industrial Average lagged slightly, finishing 0.3% lower, while smaller-cap indices led to broader participation, with the Russell 2000 up 1.0% and the S&P MidCap 400 advancing 1.3%.
At its peak on Friday morning, the S&P 500 established an all-time high of 6,532.65, while the Nasdaq Composite set a record high around the same time at 21,878.81.
Mega-cap leadership remained pivotal. Alphabet’s antitrust ruling, which allows the company to retain its Chrome browser, provided a catalyst for gains in the communication services sector, helping it rise 5.1% on the week. Tech-heavy Nasdaq components also benefited from favorable earnings and the ongoing narrative of Fed policy support, driving the Information Technology sector slightly higher (+0.2%).
Defensive sectors offered mixed results amid the broader risk-on sentiment. The healthcare (+0.4%) and consumer staples (+0.3%) sectors posted modest gains, while the utilities sector (-1.1%) lagged. The energy sector (3.5%) finished lower while the financials sector (-1.7%) also lagged as softer labor data prompted concerns over future loan demands. Meanwhile, the consumer discretionary sector advanced 1.6%, supported by strong performances in Amazon and Tesla.
Economic data reinforced expectations for easing. Softer-than-expected August nonfarm payrolls (22K; Briefing.com consensus 78K) and private payrolls (+38K; Briefing.com consensus 90K), coupled with modest wage growth, supported the probability of a September rate cut, which has now reached 100% in the CME FedWatch Tool. At the same time, ISM services, ADP employment, and productivity data reflected a mixed labor and services backdrop, adding nuance to market sentiment.
Overall, the week highlighted mega-cap dominance alongside broad-based participation, with smaller-cap outperformance confirming investor confidence in the Fed’s forthcoming policy actions while navigating mixed corporate and macroeconomic signals.
- S&P Midcap 400: +1.3% WTD
- Nasdaq Composite: +1.1% WTD
- Russell 2000: +1.0% WTD
- S&P 500: +0.3% WTD
- DJIA: -0.3% WTD
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8076115.12 (Exp. 12/25)