Wall Street indexes rise as interest rate cuts intensify, but suffer losses throughout the week

NEW YORK: US stocks ended sharply higher on Friday as traders increased their bets on a Federal Reserve rate cut next month, while all three major indexes posted losses this week on concerns about high technology valuations. Nvidia shares rose briefly in afternoon trading after sources familiar with the matter said the Trump administration is considering a green light for the sale of the company’s H200 artificial intelligence chips to China. New York Fed President John Williams, a voting member of the Federal Open Market Committee, said the central bank can still cut rates “in the near term” without jeopardizing its inflation target. Traders now see a roughly 70% chance that the Fed will cut key interest rates by 25 basis points in December, compared to a nearly 37% chance earlier in the day, according to the CME FedWatch Tool.

“The big tailwind today is the shift in rate cut odds for the December Fed meeting,” said Ross Mayfield, investment strategist at Baird in Louisville, Kentucky.

According to preliminary data, the S&P 500 gained 64.89 points, or 0.99%, to end at 6,603.65, while the Nasdaq Composite gained 192.83 points, or 0.87%, to 22,273.08. The Dow Jones Industrial Average rose 505.03 points, or 1.08%, to 46,257.29.

Stocks have been volatile over the past two sessions, reflecting increased investor anxiety about sky-high valuations in the technology sector and what could happen at the December Fed meeting.

Boston Fed President Susan Collins told CNBC the policy was “in the right place,” signaling skepticism about the need for another rate cut. Her stance is in stark contrast to dovish signals from some industry peers, a disagreement that could fuel market volatility ahead of the December meeting. Global brokers remained divided on the likelihood of a rate cut in December after Thursday’s release of the long-delayed September jobs report, which marks the final employment data before the Fed’s ruling next month. Shares of Eli Lilly finished higher after the company became the first drugmaker to reach a market cap of $1 trillion. Alphabet shares also closed sharply higher on Friday.