The Nasdaq Composite notched a perfect week of record closes on Friday as traders bet weakening jobs data and tame inflation would push the Federal Reserve to lower interest rates next week. The tech-heavy index rose 0.44 per cent to finish at 22,141.10, driven higher by a rally in Tesla shares. The S&P 500 slipped just 0.05 per cent to 6,584.29, while the Dow Jones Industrial Average lost 273 points, or 0.59 per cent, to settle at 45,834.22. That pullback came a day after the Dow closed above 46,000 for the first time in history.
Despite Friday’s softer finish, all three benchmarks ended the week in positive territory. The S&P 500 gained 1.6 per cent for its best performance since early August, the Nasdaq advanced 2 per cent for its second consecutive weekly rise, and the Dow climbed 1 per cent, snapping a two-week losing streak.
Economic signals fuel rate cut expectations
Attention now turns to the Federal Reserve’s policy meeting on September 17, with futures markets pricing in a quarter-point rate cut as almost certain.
Data released last week reinforced the case for easier policy. The consumer price index rose 0.4 per cent in August, the sharpest gain in seven months, but that was overshadowed by jobless claims surging to their highest level since October 2021. Downward revisions to payroll growth earlier in the week painted a picture of a slowing labour market and easing inflation pressures.
Global central banks in focus
The Fed’s decision will headline a week crowded with monetary policy announcements. The Bank of England, Bank of Japan and Bank of Canada are also scheduled to release verdicts on rates, making it a pivotal moment for investors assessing the trajectory of global growth.
Outlook for Australian market
Australian shares are set to open weaker on Monday, with futures pointing to a 59 points, or 0.7 per cent decline. Even so, analysts say medium-term prospects remain favourable, with a global rate-cutting cycle expected to support valuations despite ongoing tariff risks.
