US stocks open higher with Fed interest rate cuts in focus

Investing.com -- US stocks opened higher on Friday, as investors held on to expectations of lower interest rates ahead of a Federal Reserve meeting that could potentially herald a larger easing cycle. 

Wall Street indexes have largely shrugged off some strong readings on consumer and producer inflation this week, with a rally in technology stocks, fueled by renewed optimism over artificial intelligence, also factoring into gains. 

U.S. stocks also rose past some political uncertainty after a heated presidential debate between Donald Trump and Kamala Harris, where analysts saw Harris gaining an edge over the Republican candidate. 

By 09:37 ET (13:37 GMT), the benchmark S&P 500 had gained 16 points or 0.3%, the tech-heavy Nasdaq Composite had increased by 56 points or 0.3%, and the 30-stock Dow Jones Industrial Average had advanced by 111 points or 0.3%.

Fed set to cut rates, markets split between 25 or 50 bps decision

The central bank is widely expected to cut interest rates when it meets next week , although investors are split over whether it will cut rates by 25 or 50 basis points.

While sticky inflation data released this week saw expectations shift towards a 25-basis point cut, some soft labor market data has bolstered bets for a steeper 50-basis point cut. 

Traders were seen pricing in a 51% chance for a 25 bps, and a 49% chance of a 50 bps cut, CME Group's closely-monitored FedWatch tool showed on Friday. 

Next week’s decision is likely to mark the beginning of an easing cycle for the Fed, with the central bank expected to cut rates by at least 100 bps this year. But investors were now seeking more concrete cues on this front, given that while Fed officials have signaled potential rate reductions, they have not provided any clear cues on the scale of any planned cuts.

Boeing (NYSE:BA ) workers vote to strike

In corporate news, More than 30,000 Boeing workers are set to go on strike after the company’s factory employees in the US Pacific Northwest voted for a work stoppage over demands for higher pay, presenting more challenges for the aerospace giant.

Shares in Boeing dipped by over 3% prior to the opening bell on Wall Street.

Meanwhile, Adobe (NASDAQ:ADBE )'s fourth-quarter revenue guidance missed analysts' expectations, sending shares in the Photoshop-owner sharply lower. The California-based group said it anticipates that sales during the period will come in at $5.50 billion to $5.55 billion, below LSEG forecasts of $5.61 billion, Reuters reported.

Shares in Oracle (NYSE:ORCL ) rose after the database software group unveiled a revenue outlook for its 2026 fiscal year that topped analysts' expectations. The firm said it now expects to post revenue of $66 billion during the period. Analysts had seen the number at $64.5 billion, according to LSEG data cited by media outlets.

Oil on course for positive week

Oil prices rose in European trade on Friday and were set for a positive close to the week as concerns over supply disruptions stemming from Hurricane Francine helped crude rebound from near three-year lows.

But the prices were still nursing steep losses from last week, and were trading only marginally above this week’s lows, as persistent worries over slowing demand tempered crude’s advance.

Brent oil futures expiring in November rose 0.8% to $72.57 a barrel, while West Texas Intermediate crude futures increased by 0.9% to $69.58 per barrel by 09:43 ET.

Both contracts are on track to break a string of weekly declines if the gains hold.

Ambar Warrick contributed to this report.

Source: Investing.com