US Stock Market Climbs as Traders Anticipate Fed Rate Cut

US equities experienced gains on Friday as traders responded to a recent inflation report and prepared for the upcoming Federal Reserve meeting. Major indexes posted moderate advancements, supported by a surge in technology shares and a generally positive sentiment across global markets. In early trading, the S&P 500 rose by 0.4%, the NASDAQ 100 increased by 0.7%, and the Dow Jones Industrial Average climbed 0.5%.

Inflation Data and Market Reactions

The Federal Reserve’s preferred inflation measure indicated minimal movement. The core personal consumption expenditures index increased by 0.2% in September, aligning with expectations for the third consecutive month. This data led markets to interpret the inflation reading as a sign that inflation pressures are gradually easing, although the progress remains inconsistent.

In the labor market, jobless claims fell to their lowest level since September 2022, while Challenger reported over one million layoffs year-to-date due to restructuring, automation, and adjustments related to tariffs. Despite these mixed signals, traders assigned an 87% probability to a quarter-point rate cut in the next Federal Reserve meeting, according to CME FedWatch data.

Market participants shifted their focus towards domestically oriented stocks in anticipation of the Federal Reserve’s decision. Small-cap shares, which are particularly sensitive to borrowing costs and local economic conditions, responded positively, with the Russell 2000 surging by more than 1% in early trading.

Sector performance showed a favorable trend, particularly in communication services, which led with a gain of 0.91%. This rise was supported by steady demand for prominent technology firms. However, some analysts adopted a cautious stance. According to Bank of America, a softer message from the Fed may indicate a more significant economic slowdown than anticipated. Bloomberg Intelligence noted that its U.S. market health checklist, which had been improving throughout the summer, now suggests that momentum is beginning to stall.

Despite these concerns, capital continued flowing into equities, with U.S. stock funds recording a twelfth consecutive week of inflows, amounting to approximately $700 million.

Movements in Crypto and Key Companies

In the cryptocurrency market, Bitcoin declined by 1.5%, trading near $90,807 as investors reduced their exposure to digital assets. Ether saw a slight rebound, trading around $3,127. Institutional interest in spot Bitcoin exposure has shown signs of diminishing, with BlackRock’s iShares Bitcoin Trust ETF (IBIT) experiencing more than $2.7 billion in outflows over the past five weeks, marking the longest streak of withdrawals since its launch in January 2024.

In notable corporate news, Netflix announced its intention to acquire Warner Bros. Discovery’s film and streaming assets in a landmark deal valued at $72 billion. Following this announcement, Warner Bros. Discovery shares increased by about 2%, while Netflix’s stock dipped roughly 2%.

Other notable movements included shares of Cooper Companies, which rose more than 13% after issuing guidance for adjusted earnings per share in 2026 that exceeded analyst expectations. Ulta Beauty gained about 6% following a revision of its full-year outlook based on stronger-than-expected third-quarter results. In contrast, SoFi’s stock fell around 7% after revealing a $1.5 billion equity offering, while DocuSign decreased approximately 5% despite surpassing consensus forecasts, as investors focused on future growth signals.

As traders look ahead, attention now turns to the Federal Reserve’s upcoming meeting. Officials are expected to consider stable inflation, softer labor data, and overall financial conditions as they outline the next steps in monetary policy.

This article serves as an overview of the recent movements in the U.S. stock market and related sectors, reflecting the ongoing shifts in economic conditions and investor sentiment.