Nasdaq Closes at Record High on Hopes for September Rate Cuts | Wall Street Today

Stocks rose Friday as data revealed that American consumers have lowered their inflation expectations, boosting optimism about potential Federal Reserve rate cuts this year.

Goldman Sachs economists now predict the Federal Reserve will cut interest rates in September, rather than July. However, traders are now pricing in less than a 50% chance the central bank will cut rates at its September meeting, according to the CME FedWatch Tool.

A monthly measure of U.S. consumer sentiment dropped to its lowest point in six months in May due to expectations of higher inflation, according to a survey released on Friday.

Consumers expect prices will climb at a 3.3% annual rate over the next year, down from the 3.5% that was expected earlier in the month, University of Michigan data showed Friday.

Meantime, Fed Gov. Christopher Waller said he still thinks the neutral interest rate is relatively low, though he warned that unsustainable fiscal spending could alter that trend.

Oil prices remained near a three-month low as traders considered lower geopolitical risks and signs that the global market has enough supply ahead of next month's OPEC+ meeting.

Both Brent and West Texas Intermediate futures closed higher on Friday, but they still posted weekly declines of over 2%, hovering near their lowest prices since February.

AMC shares surged 7.7%. GameStop shares jumped nearly 6%.