Wall Street edges toward record as investors await Fed rate call

US stocks inched closer to record territory on Friday as Wall Street rounded off a subdued trading week. The S&P 500 gained 0.3 per cent and now sits just 0.2 per cent below its all-time high. The Dow Jones Industrial Average was up 46 points, or 0.1 per cent, while the Nasdaq Composite rose 0.4 per cent in early trade. The Russell 2000, which tracks smaller companies, slipped 0.2 per cent after touching a new peak on Thursday.

The quiet session came despite several eye-catching corporate moves. Netflix dropped 2.1 per cent after confirming it would acquire Warner Bros. in a cash-and-stock deal valued at USD 72 billion, following the studio’s split from Discovery Global. Shares in Warner Bros. Discovery climbed 2.6 per cent.

Retailer Ulta Beauty surged 11 per cent after posting stronger-than-expected quarterly earnings and higher revenue. Chief executive Kecia Steelman said shoppers remain under pressure but noted broad category growth and a strong e-commerce performance. The company raised its full-year revenue outlook.

Victoria’s Secret also delivered an upbeat surprise, reporting a smaller loss than anticipated and upgrading its annual sales forecast. Its shares jumped 14.4 per cent. The gains helped offset a 3.9 per cent decline in Hewlett Packard Enterprise after the firm revealed weaker revenues, although profits exceeded expectations.

The week has marked a noticeable pause from recent market volatility. Earlier bouts of sharp swings were driven by anxieties over a surge of capital chasing artificial intelligence stocks and uncertainty surrounding the Federal Reserve’s interest-rate path.

Most traders now expect the Fed to cut rates next week to support a cooling jobs market. If confirmed, it would be the third reduction this year. Lower borrowing costs tend to lift asset prices and stimulate growth, but the risk of rekindling inflation remains. Consumer prices are still running above the Fed’s 2 per cent target.

Optimism about easing policy has helped push the S&P 500 back towards its October record. Investors are now focused on signals from the upcoming Fed meeting that could indicate the central bank’s direction in 2025.

Bond markets were steady. The 10-year Treasury yield held at 4.11 per cent, while the two-year yield, which is more sensitive to policy expectations, edged up to 3.54 per cent.

Overseas equity markets were broadly firmer. Germany’s DAX rose 0.9 per cent and South Korea’s Kospi gained 1.8 per cent. Tokyo’s Nikkei 225 slid 1.1 per cent after data showed household spending in Japan fell 3 per cent in October from a year earlier, the sharpest decline since January, amid speculation that the Bank of Japan may be preparing for interest-rate hikes.

With PTI inputs