Nasdaq 100 and S&P500: Microsoft and Tesla Fuel Midday Gains as Rate Cut Hopes Grow

S&P 500 and Nasdaq Hit Records Midday as Rate Cut Bets Fuel Gains

Wall Street traded mixed at midday Friday, with the S&P 500 and Nasdaq reaching record highs while the Dow slipped, weighed down by losses in financials and industrials. Despite the divergence, all three indexes are on pace for weekly gains, driven by strong tech performance and increased expectations of a Federal Reserve rate cut.

Where Do the Major Indexes Stand Now?

As of 16:56 GMT, the Dow Jones Industrial Average was down 188.64 points, or 0.41%, to 45,919.36. The S&P 500 edged up 2.73 points, or 0.04%, to 6,590.20, and the Nasdaq Composite climbed 103.06 points, or 0.47%, to 22,146.13. All three benchmarks are on track to finish the week higher.

Will the Fed Signal a Cut Next Week?

Traders are fully pricing in a 25 basis point cut at next week’s Fed meeting, with a 5.5% chance of a more aggressive 50-point move. A combination of soft labor market data and a cooler inflation print on Thursday has driven the market’s dovish tilt. Fed funds futures now imply nearly three quarter-point cuts by year-end.

Sentiment is also turning more cautious. The University of Michigan’s consumer confidence index declined for a second month, with growing concerns about inflation, job stability, and business conditions.

Which Stocks Are Driving the Tech-Led Rally?

Tech remains the engine behind the market’s strength. Microsoft gained 2.1% after avoiding an EU fine by decoupling Teams from its Office suite, helping lift the S&P 500’s information technology sector.

Tesla surged 6%, building on nearly 12% gains over the past week, even in the absence of corporate news. Traders are betting that falling interest rates will support auto demand by easing financing conditions.

AI-related optimism also stayed intact. Oracle’s bullish guidance earlier in the week helped keep semiconductors and data center-focused utilities bid.

What’s Weighing on Broader Market Sentiment?

Eight of 11 S&P sectors were in the red by midday, with miners leading losses, down 1.1%. The Dow was dragged down by Goldman Sachs and Sherwin-Williams. Vaccine makers also underperformed: Moderna dropped 8.2%, Pfizer fell 3%, and Novavax slid 4.5% after reports linking vaccines to child fatalities.

Elsewhere, Six Flags Entertainment rallied 7% after reporting improved attendance and strong 2026 season pass demand. Joby Aviation rose 2% after announcing it would join a White House-backed pilot program for electric air taxi tech.

Midday Outlook: Can Bulls Push Through the Close?

Despite uneven sector performance, major indexes remain on track for a strong week. Tech’s continued momentum, particularly around AI and falling rate expectations, is keeping bulls in control. Next week’s Fed meeting will be the key catalyst — a confirmed rate cut could keep the rally alive, while any hesitation may invite near-term consolidation.

More Information in our Economic Calendar.