Wall Street Sees Gains Amid Economic Optimism and Tech Surge

The Nasdaq and S&P 500 concluded higher on Friday, buoyed by gains in Tesla and Amazon. Economic data suggesting solid consumer spending raised expectations for a Federal Reserve interest rate cut in September. Chipmakers Broadcom and Marvell Technology also saw significant gains.

The Nasdaq and S&P 500 ended higher on Friday, with Tesla and Amazon climbing after fresh U.S. economic data raised expectations that the Federal Reserve will cut interest rates modestly in September. U.S. consumer spending increased solidly in July, suggesting the economy remained strong while prices rose moderately.

"Investors are seeing another sign of being in a soft landing," said Cameron Dawson, chief investment officer at Newedge Wealth. "It's another one of those Goldilocks kind of reports really threading a needle right down the center. The market is really getting exactly what it wanted." A "just-right" Goldilocks economy has steady growth, but not too much that it fuels excessive inflation.

Amazon.com and Tesla each made gains. Broadcom rallied, while Marvell Technology surged after the chipmaker forecast quarterly results above estimates.

Friday's personal consumption expenditures report was the last major economic data release before the Fed's September meeting. Chair Jerome Powell last week expressed support for an imminent policy adjustment. Money markets suggest traders mostly expect the Fed to cut rates by 25 basis points in September, with odds of a 50 basis point cut dimming further after Friday's data, according to CME Group's FedWatch Tool.

Friday ends a tumultuous month on Wall Street after signs of a sudden moderation in the labor market in early August sparked fears of a U.S. recession. The influence of the Japanese yen carry trade worsened the rout. Shares have rebounded since then, with the S&P 500 trading near record highs.

Trading volume has been thin this week ahead of Monday's U.S. stock market holiday for Labor Day. According to preliminary data, the S&P 500 gained 55.64 points, or 1.00%, to end at 5,647.60 points, while the Nasdaq Composite gained 194.30 points, or 1.11%, to 17,710.73. The Dow Jones Industrial Average rose 214.86 points, or 0.52%, to 41,549.91.

Nvidia rose, rebounding from a 6.4% drop in the previous session after the artificial intelligence-chip bellwether failed to match sky-high investor expectations, despite upbeat results and a broadly in-line forecast. Ulta Beauty slid after it trimmed its annual results forecasts, citing slowing demand for higher-priced cosmetics and fragrances at its stores.

Intel jumped following a report it was exploring options that could include a merger. Dell Technologies, another AI-related stock, advanced after lifting its annual revenue and profit forecasts.

Shares of Trump Media & Technology Group, majority owned by former U.S. President Donald Trump, dipped to a record low, leaving its stock market value at $3.9 billion.

(With inputs from agencies.)