Wall St indexes rise slightly, traders assess Fed comments

By Sinéad Carew and Shristi Achar A

(Reuters) -Wall Street’s three main stock indexes edged higher on Friday as investors digested recent gains while remarks from Federal Reserve officials clouded the outlook about when the U.S. central bank might start cutting interest rates.

Vice Chair for Supervision Michael Barr said he believes the Fed is at or near the peak of interest rate hikes, but San Francisco Fed chief Mary Daly and Boston Fed President Susan Collins highlighted the need for more evidence of cooling inflation.

Adding some pressure, shares of Applied Materials (NASDAQ:) tumbled 4.4% after its third-quarter report and news the U.S. Justice Department is investigating allegations that the semiconductor equipment maker violated export curbs to China.

The 10-year Treasury note yield was down slightly after touching a two-month low during the session.

The , the Nasdaq and the Dow were poised for weekly gains of more than 2%, their third straight week of gains.

For the S&P and the Dow this would be the longest winning streak since July. For the Nasdaq it would be the longest run of weekly gains since June.

“We’ve come a long way. We need to digest some of these moves and look for what the next catalyst is. Earnings is behind us. The Fed is on hold and is going to be in December. The equity market is looking for guidance,” said Jack McIntyre, portfolio manager at Brandywine Global in Philadelphia.

Looking for cues from the bond market, McIntyre expects November labor and inflation data as the next big catalyst.

The rose 20.04 points, or 0.06%, to 34,965.51, the S&P 500 gained 7.71 points, or 0.17%, to 4,515.95 and the added 25.61 points, or 0.18%, to 14,139.29.

Megacap stocks were a mixed bag, with Microsoft (NASDAQ:) and Alphabet (NASDAQ:) falling more 0.8% and 2.1% respectively while Amazon.com (NASDAQ:) was up 1.5%.

Amazon announced it is trimming jobs at its Alexa voice assistant unit, citing shifting business priorities and a greater focus on generative artificial intelligence.

While money markets have fully priced in that the Fed will hold rates steady at its December meeting, bets for a 25-basis-point rate cut in May stood near 50%, down from about 69% earlier in the day, according to the CME Group’s (NASDAQ:) FedWatch tool.

The communication services index, down 0.6% led declines among the 11 major S&P 500 sectors. Energy shares led the advancing sectors, rising 2.5% as oil prices gained. [O/R]

The small-cap index climbed 1.3%, outperforming broader markets, and was eyeing weekly gains of more than 5%.

Gap surged 28.6%, as the apparel retailer posted better-than-expected third-quarter results due to improving sales at Old Navy and easing supply expenses.

ChargePoint (NYSE:) Holdings slumped 35.3% as the electric-vehicle charging network provider lowered estimates for third-quarter revenue. It also named Rick Wilmer CEO.