Wall Street Aims For Fifth Straight Gain, Small Caps Soar As 2-Year Yields Hit 2-Year Lows, Adobe Sinks: What's Driving Markets Friday?

Wall Street is experiencing a risk-on session Friday, with all sectors of the S&P 500 index trading in the green as traders are energized by the now-imminent Federal Reserve rate cut, expected in less than a week.

Both the S&P 500 and Nasdaq 100 are on track for their fifth consecutive session of gains, pushing their weekly performances to 4% and 5.7%, respectively, and fully recouping last week’s losses.

Friday saw small-cap stocks build significant momentum, once again outperforming their large-cap counterparts amid the euphoria over the anticipated Fed rate cuts.

A large overnight bet by a trader on a 50-basis-point Fed rate cut sent the 2-year Treasury yield down by 7 basis points to 3.58%. This puts it on track to close at its lowest level since September 12, 2022.

Market-implied probabilities for a half-point cut surged to as high as 43%, according to CME FedWatch data.

Gold, as tracked by the SPDR Gold Trust GLD, continues to extend its historic highs, rising by 1%. Meanwhile, silver has roared ahead with a 3.3% gain, bringing its weekly performance to a stunning 16%, marking its best week since April 2020.

The rally in precious metals has been a boon for miners. The VanEck Gold Miners ETF GDX has extended its weekly gains beyond 10%, its best performance since March 2023.

Oil prices are cooling off, slipping by 0.4% after Thursday’s sharp rally. In the cryptocurrency market, Bitcoin gained 2.2%, climbing to $59,400 and is on track to close at its highest level since late August.

Friday’s Performance In Major US Indices, ETFs

Major Indices	Price	1-day %chg
Russell 2000	2,182.68	2.4%
Dow Jones	41,355.75	0.6%
S&P 500	5,620.96	0.5%
Nasdaq 100	19,484.48	0.3%

According to Benzinga Pro data:

• The SPDR S&P 500 ETF Trust SPY was 0.4% higher to $561.37.
• The SPDR Dow Jones Industrial Average DIA rose 0.7% to $414.78.
• The tech-heavy Invesco QQQ Trust Series QQQ inched 0.2% higher to $474.18.
• The iShares Russell 2000 ETF IWM rallied 2.4% to $216.84.
• Both the Utilities Select Sector SPDR Fund XLU and the Materials Select Sector SPDR Fund XLB outperformed, up 1.2%. The Technology Select Sector SPDR Fund XLRE showed the smallest gains, up 0.3%.

Friday’s Stock Movers

• Adobe Inc. ADBE fell over 9%, despite reporting better-than-expected results last quarter, as revenue guidance missed forecasts.
• Boeing Inc. BA dropped 3.8% after 33,000 union workers launched a strike on Friday, rejecting the company's proposed four-year contract amid ongoing challenges at the aircraft manufacturer.
• United Airlines Holdings, Inc. UAL gained nearly 2% after announcing an agreement with SpaceX to equip its fleet with Starlink’s high-speed Wi-Fi service.
• Warner Bros Discovery Inc. WBD rose over 9%, on track for the strongest 2-day rally since 2008, after announcing a multi-year partnership with Charter Communications Inc. CHTR.
• Garmin Ltd. GRMN dropped more than 6% after Barclays downgraded the stock from ‘Equal-Weight’ to ‘Underweight’ and slashed the price target from $181 to $133 per share.

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Image created using artificial intelligence via Midjourney.