June 16 (Reuters) – U.S. stock indexes rose on Friday and were on course for weekly gains, as signs of easing price pressures and slowing economic growth raised hopes the Federal Reserve could end its monetary tightening campaign soon.
The S&P 500 (.SPX) and Nasdaq (.IXIC) rallied to fresh 14-month highs on Thursday as a slew of economic data pointed to cooling inflation, eclipsing concerns about further interest rate hikes that the Fed forecast on Wednesday.
The U.S. central bank signaled borrowing costs could rise by as much as half a percentage point by the end of this year but traders have priced in just one more 25-basis-point rate hike, expected in July, as per CMEGroup’s Fedwatch tool.
“The proverbial ‘thread the needle’ outcome engineered by the Fed’s efforts to tame inflation, at the same time not quelling economic growth is the narrative that has been embraced by investors,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
“The enthusiasm can be seen by way of the rally, that is fortunately beginning to broaden beyond just the narrow group of AI-related companies.”
Gains in megacap stocks including Nvidia and Microsoft set up the tech-heavy Nasdaq for its eighth consecutive week of gains, while the benchmark S&P 500 was set for its fifth straight week of rise.
Microsoft (MSFT.O) edged 0.1% higher, a day after its shares closed at an all-time high and the software giant notched a record market value of $2.59 trillion.
Nvidia (NVDA.O) rose 1.2% to fresh record highs after Morgan Stanley hiked its price target to $500 and named the chipmaker as its top pick among U.S. semiconductor firms.
Trading, however, is expected to be volatile on Friday due to the simultaneous expiration of stock options, stock index futures and index options contracts, known as triple witching.
In economic data, the University of Michigan’s preliminary reading on consumer sentiment, due at 10:00 a.m. ET, is expected to show the index rose to 60 in June from 59.2 in May.
At 9:41 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 64.12 points, or 0.19%, at 34,472.18, the S&P 500 (.SPX) was up 8.32 points, or 0.19%, at 4,434.16, and the Nasdaq Composite (.IXIC) was up 8.50 points, or 0.06%, at 13,791.32.
Adobe Inc rose 3.4% after the Photoshop maker’s earnings forecast surpassed analyst estimates as efforts to drive up demand with generative artificial intelligence (AI) integrations pay off.
Maker of Roomba vacuum cleaners iRobot Corp (IRBT.O) jumped 18.9% after Britain’s competition regulator cleared Amazon.com’s (AMZN.O) planned $1.7 billion acquisition of the company.
Advancing issues outnumbered decliners by a 1.92-to-1 ratio on the NYSE and a 1.48-to-1 ratio on the Nasdaq.
The S&P index recorded 19 new 52-week highs and no new lows, while the Nasdaq recorded 74 new highs and 10 new lows.
Reporting by Sruthi Shankar and Shristi Achar A in Bengaluru
Editing by Vinay Dwivedi
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