Nasdaq 100: Tech Stocks Firm Today as PCE Data Fuels Dovish Fed Forecast for US Stocks

Wall St Creeps Higher as Rate-Cut Hopes Firm Up

Wall Street edged higher on Friday, and the tone felt steadier as traders leaned into fresh data that nudged Fed rate-cut odds even further in their favor. The latest PCE read — the first since a weeks-long government shutdown froze the flow of official stats — showed only a marginal pickup in consumer spending.

Not a blowout, but enough to reinforce the idea that growth is cooling without collapsing. With inflation still above target, the market read it as “soft enough” rather than “problematic,” and that was enough for buyers to stay engaged.

Is the data giving the Fed cover to cut?

Pretty much. Early December consumer sentiment improved on expectations that price pressures will ease next year, and that combination — softer spending, cooler inflation hopes — helped push Fed Funds futures to an 87% probability of a 25 bp cut this month.

Traders like the setup, even if they’re not betting on an aggressive easing cycle. The labor market looks a little weaker on the edges, and that’s keeping hawks and doves closer in tone than usual heading into what could be a tense meeting. The bottom line: the market thinks the Fed has room to move, but not to sprint.

How did the indexes trade into the weekend?

The Dow, S&P 500, and Nasdaq all added roughly 0.15–0.20% by late afternoon, with both the S&P and Nasdaq tagging one-month highs earlier in the session. Nothing explosive, but clearly constructive.

The standout trend this week had been rotation: small caps outperformed as rate-cut beneficiaries caught a bid, with the Russell 2000 up about 1% on the week before giving back 0.2% on Friday.

Communication services led sector gains with a 1% pop, while healthcare lagged after vaccine advisers reversed long-standing guidance on newborn hepatitis B shots.

Any notable movers worth flagging?

Definitely. Ulta rallied 14% after raising its annual sales and profit outlook — strong demand and solid execution kept buyers chasing. Warner Bros. Discovery added almost 3% after Netflix won a high-stakes bidding war for a historic Hollywood asset at $72 billion. Ironically, Netflix slipped 3% on the news, while Paramount Skydance, another bidder, dropped 7.5%.

Breadth leaned positive on the NYSE and slightly negative on the Nasdaq — a mixed read, but not one that undermined the broader tone.

What matters next for traders?

It’s all about the Fed meeting. The market wants to lean bullish — the S&P is less than 1% away from a record — but traders aren’t willing to press too hard until they hear how unified (or not) policymakers sound around that December cut.

A softer inflation path would keep dip-buyers active. A tougher Fed tone could cool enthusiasm quickly. For now, expectations are set, positioning is cautious-but-long, and the next catalyst is already on the calendar.

More Information in our Economic Calendar.