Wall Street's main indexes closed higher on Friday as investors honed in on the chance of a bigger interest rate cut by the Federal Reserve next week, with rate-sensitive small cap stocks outperforming.

Bets on the size of the Fed's cut have been volatile and were roughly even by late Friday. Expectations for a 50 basis point cut jumped to 49% from 28% on Thursday, according to CME's FedWatch Tool, which showed a 51% probability for a 25 basis point cut.

Market Snapshot

The Dow Jones Industrial Average rose 297.01 points, or 0.72%, to 41,393.78, the S&P 500 rose 30.26 points, or 0.54%, to 5,626.02 and the Nasdaq Composite rose 114.30 points, or 0.65%, to 17,683.98.

Market Movers

Arm shares rose 5.88%. The analysts said that Arm, as the dominant supplier of energy-efficient processor/subsystems IP, the company is well-positioned to benefit from rapid growth of generative Al in the cloud and at the edge.

Boeing fell 3.7% after the aerospace company ’ s biggest union, representing about 33,000 workers, went on strike after voting down a new, four-year labor deal. The strike will halt work on the company ’ s best-selling 737, 777, and 767 jets.

Trump Media & Technology soared 12% after former President Donald Trump said he won ’ t sell his stake when his lockup period expires on Sept. 20.

Oracle rose 0.4% after the enterprise software company said it expects fiscal 2026 revenue of at least $66 billion, higher than a previous internal target of $65 billion, and higher than analysts ’ projections of $64.4 billion. Doug Kehring, executive vice president of corporate operations, said at the company ’ s analyst day that Oracle was still "focused on the bottom line" and was looking to grow earnings per share by at least 10% in fiscal 2026. The company also said it expects fiscal 2029 revenue of $104 billion on continued strong demand in the cloud.

Adobe reported fiscal third-quarter adjusted earnings that beat analysts ’ estimates as revenue rose 11% to $5.41 billion and topped forecasts. The software company said revenue at its digital media segment — which houses Creative Cloud and Document Cloud — was up 11% from last year to $4 billion. The stock fell 8.5%, however, after Adobe said it expects adjusted earnings of $4.63 to $4.68 a share in the fourth quarter compared with Wall Street estimates of $4.67 and revenue of $5.5 billion to $5.55 billion, below expectations of $5.6 billion.

Second-quarter adjusted earnings at RH beat analysts ’ estimates on accelerating demand and shares of the home-furnishings retailer surged 25%. RH said it expects third-quarter revenue growth of 7% to 9%. RH shares soared 25%.

Moderna dropped 2% after finishing Thursday with a decline of 12% following the vaccine maker ’ s announcement that it plans to cut research-and-development spending by 20% beginning in 2025. Analysts at J.P. Morgan reduced their recommendation on the stock to Underweight from Neutral, while Jefferies downgraded the shares to Hold from Buy.

Garmin, the Swiss maker of navigation devices and fitness trackers, closed down 5.1% to $172.68 as analysts at Barclays downgraded the stock to Underweight from Equal Weight and cut their price target to $133 from $181.

U.S.-listed shares of PDD fell 2.4% and Alibaba declined 0.9% after the White House said it was taking steps to address an influx of cheap shipments from the companies that enter the U.S. without taxes incurred. Etsy, which competes with the Chinese e-commerce companies, rose 7.6%.

Uber Technologies rose 6.5% after reaching an agreement for Google ’ s Waymo to use the Uber app for paid rides in Atlanta and Austin, Texas, starting in early 2025.

ViaSat tumbled 15% after United Airlines announced a deal with Elon Musk ’ s SpaceX for in-flight internet service. The agreement is a blow to ViaSat, which is a competing supplier of space-based Wi-Fi.

Market News

US Consumer Sentiment Climbs to Four-Month High; Import Prices Drop

U.S. consumer sentiment rose to a four-month high in September amid expectations that inflation will continue moderating over the next year and household incomes improve, but views on the labor market weakened against the backdrop of slower job gains.

The brightening inflation outlook was reinforced by other data on Friday showing import prices dropped by the most in eight months in August, driven by a broad decline in the costs of goods. Government data this week showed mild increases in producer and consumer prices in August.

Trump Says He Is Not Selling His Shares of Media Company

Republican presidential candidate Donald Trump said on Friday he will not sell his shares in the company that owns his Truth Social platform when limits on selling are lifted in the coming days, driving up the stock after a recent selloff.

Trump owns about 57% of Trump Media, which saw its shares slump this week following his televised debate with Democratic rival Vice President Kamala Harris.

Intel Qualifies for $3.5 Billion in Grants to Make Chips for US Military

Intel Corp has officially qualified for as much as $3.5 billion in federal grants to make semiconductors for the U.S Department of Defense, Bloomberg News reported on Friday, citing people familiar with the matter, after the chipmaker reached a binding agreement with U.S officials.