Wall Street Braces for Upward Momentum Ahead of Fed Discourse

Anticipation is high on Wall Street as U.S. stocks gear up for a potential rise on Friday, with investors eagerly awaiting insights from Federal Reserve officials regarding the nation's monetary policy trajectory. This follows a week of robust economic data, fueling expectations of interest rate cuts.

After a brief selloff last month, Wall Street indexes are edging closer to record highs, buoyed by signs of a cooling U.S. labor market. This data has prompted speculation that the Fed may implement multiple rate cuts throughout the year.

Boosted by a significantly better-than-expected earnings season, both the benchmark S&P 500 and the tech-heavy Nasdaq Composite are on track for their third consecutive week of gains. The blue-chip Dow, currently experiencing its lengthiest daily winning streak since December, is poised for a fourth consecutive week of gains.

Hugh Anderson, managing director at HighTower Advisors, commented, "This is a classic scenario where adverse employment data translates into positive market sentiment. While it may not be favorable for job seekers, it fosters an optimistic outlook for investors as they anticipate potential interest rate cuts."

Market sentiment reflects an expectation of rate cuts by the end of 2024, with the initial cut projected for September, according to LSEG's rate probabilities tool. Although most Fed policymakers have signaled a forthcoming rate cut, uncertainty lingers regarding the timing of such measures.

San Francisco Fed President Mary Daly highlighted "considerable" uncertainty regarding future U.S. inflation trends during remarks on Thursday.

Throughout the day, speeches from several Fed policymakers, including Governor Michelle Bowman, Minneapolis President Neel Kashkari, Dallas President Lorie Logan, and Vice Chair for Supervision Michael Barr, are anticipated to provide further insights into the potential rate adjustments.

Investor attention will also be focused on the University of Michigan's preliminary survey of consumer sentiment for May, scheduled for release at 10 a.m. ET.

As of 8:25 a.m. ET, S&P 500 e-minis rose by 18.25 points, or 0.35%. Nasdaq 100 e-minis climbed 82.75 points, or 0.46%, while Dow e-minis added 107 points, or 0.27%.

In premarket trading, Nvidia saw a 1.4% increase following robust April sales reported by Taiwan Semiconductor Manufacturing Co, a key supplier to Nvidia.

Novavax shares experienced a surge, doubling in value, subsequent to the announcement of a licensing agreement with Sanofi worth up to $1.2 billion for COVID-19 vaccines, dispelling uncertainties about the company's future.

However, Akamai Technologies witnessed an 8% decline after forecasting second-quarter revenue and profit below Wall Street estimates, citing anticipated weak demand for its content delivery services.

Conversely, SoundHound AI, specializing in technology enabling conversational interactions with products like phones and cars, saw a 15.2% jump after surpassing market estimates for first-quarter revenue.

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