U.S. stocks were mixed on Friday after the Dow Jones Industrial Average, S&P 500, and Nasdaq all closed at record highs yesterday. The Dow fell 0.4% to 45,929, slipping just below the 46,000 milestone it had crossed for the first time Thursday. The S&P 500 was mostly flat, while the tech-heavy Nasdaq Composite rose 0.3% as investors rotated back into tech shares.
Markets are digesting several pieces of data pointing to a weakening labor market and sticky inflation as tariffs filter through the economy. With the Federal Reserve’s September meeting just days away, traders are overwhelmingly betting on an interest-rate cut, fueling both optimism and caution across sectors.
Market Movers:
- Warner Bros. Discovery (WBD) +14%: Shares surged after reports that Paramount Skydance is preparing a majority cash bid for the company. The move would cover Warner’s studio, cable, and streaming businesses, underscoring how media consolidation pressures are accelerating.
- Paramount Skydance (PSKY) +2%: Shares rose after news of its planned bid for Warner Bros. Discovery. The proposed deal comes just weeks after Paramount and Skydance completed their own merger, highlighting the company’s aggressive strategy to bulk up. Analysts say the cash-heavy structure could help Paramount pre-empt competing offers while positioning the firm as a stronger content powerhouse in the streaming wars.
- Tesla (TSLA) +6%: Tesla climbed to a seven-month high, up more than 5% intraday, as Wall Street welcomed momentum in its energy storage and robotics ambitions. Analysts from Wolfe Research and William Blair published bullish notes on Tesla’s energy segment, suggesting revenue could eventually top $28 billion.
- Super Micro Computer (SMCI) +5%: Shares gained after announcing it had begun delivering new servers powered by Nvidia’s advanced Blackwell Ultra AI chips. The news reinforced Supermicro’s reputation as one of the key hardware providers in the artificial intelligence boom.
- Oracle (ORCL) -3%: Oracle continued to slide after its meteoric 36% jump earlier this week on blockbuster revenue guidance. The selloff reflects profit-taking as traders lock in gains from the software giant’s rally. While fundamentals remain strong, analysts warn that volatility could continue given how sharply shares moved in such a short period.
- RH (RH) -12%: RH tumbled after missing profit and sales estimates and cutting guidance. The upscale furniture retailer blamed tariffs for squeezing margins and weakening demand. Shares sank as investors grew concerned about how prolonged trade tensions and higher costs would hit the luxury housing and home goods market.
- Freeport-McMoRan (FCX) -5%: Shares dropped after reports confirmed its Indonesian copper mine remains shut following a deadly mudslide earlier this week. Seven workers were trapped in the incident, and operations have yet to resume.
Economic Data and Tariff Impact
Fresh economic data gave investors more to digest ahead of the Fed’s policy meeting. The University of Michigan’s September consumer sentiment survey showed a sharper-than-expected decline in confidence as Americans cited concern over rising tariffs. Long-term inflation expectations jumped to 3.9%, their highest in months, signaling households are bracing for more persistent price pressures. This data comes on the heels of weak labor market numbers, with job creation stalling and jobless claims at a near four-year high.
The results highlight how President Trump’s tariffs are increasingly being felt across the economy, from household budgets to corporate balance sheets. Tariff-driven cost pressures have become a key risk for consumer-facing companies like RH and could shape how the Fed frames its decision next week.
Rate Cut Bets Solidify
Markets are fully pricing in a quarter-point interest-rate cut at the September Fed meeting, with many traders anticipating multiple cuts before year-end. According to CME Group data, investors see a 90% chance of a cut next week and nearly 75% odds that the Fed will ease rates at least three more times this year. Some Wall Street analysts, including Morgan Stanley, now forecast a string of cuts through January to counter slowing growth and labor market weakness.
The prospect of lower borrowing costs has helped fuel the stock market’s rally to record highs. However, the debate continues over whether the Fed will move aggressively or cautiously in its easing cycle, with risks of over-tightening inflationary pressures still lingering.
Commodities and Currencies
Oil and gold futures advanced, reflecting demand for safe-haven and real-asset exposure as uncertainty builds around tariffs and rate policy. The 10-year Treasury yield ticked higher, reflecting some hesitancy ahead of the Fed’s decision. Meanwhile, the U.S. dollar strengthened against the euro, pound, and yen, while most major cryptocurrencies traded higher.
Looking Ahead
All eyes are now on the Federal Reserve’s September policy meeting, where investors widely expect the first in a series of rate cuts. The coming week may see quieter trading as markets brace for the decision and assess just how deeply tariffs are reshaping inflation dynamics. For now, Wall Street remains perched near record highs, supported by optimism about looser monetary policy but tempered by growing risks in trade, labor markets, and consumer confidence.