Stocks Rally On Rate Cut Bets – US Market Wrap

US stocks gained for a third consecutive week as investors were repeatedly reassured that the economy is cooling without falling off a cliff.

Treasuries rallied as data cemented bets of further interest-rate cuts by the Federal Reserve. Yields are lower across the curve, with the 10-year rate around 3.75%. The dollar declined for a fourth week.

The Fed’s preferred gauge of underlying US inflation rose mildly in August, as did inflation-adjusted consumer spending. Those figures confirmed what traders already knew about the health of economy after parsing a slew of data earlier this week. A read on US consumer sentiment on Friday matched the optimism.

Commentary from Fed officials this week did little to sway existing perceptions on the Fed’s trajectory. St. Louis Fed President Musalem said he favors ‘gradually’ lowering rates after a big cut last week. Fed Governor Bowman, meanwhile, restated her view that the US economy is still strong.

Other catalysts this week included daily stimulus announcements from China that kept sentiment largely upbeat.

Despite an overall upbeat week, the S&P 500 and the Nasdaq 100 ended Friday’s session lower, weighed down by NVIDIA Its shares fell on news that China is urging local companies to stay away from its chips.