Nasdaq hits record, traders await Fed meeting

The Nasdaq notched a record high close on Friday in a mixed trading session, lifted by Microsoft, as investors looked ahead to the Federal Reserve's policy meeting next week, when it is widely expected to cut interest rates to counter a slowdown in the jobs market.

Fuelled by Tesla and other technology-related stocks, the Nasdaq added to a rally in the previous session that saw all three indices hit all-time highs.

Investors are laser-focused on the Fed meeting on Tuesday and Wednesday. Traders expect the central bank to cut interest rates by 25 basis points after recent data showed longstanding weakness in hiring and easing inflation concerns.

"Because we had such a nice jump in the stock market yesterday, investors are basically catching their breath," said Sam Stovall, Chief Investment Strategist at CFRA Research. "There's really not going to be any data between now and Wednesday. It's a sort of wait-and-see attitude."

Microsoft gained 1.8% after the technology giant avoided a possible hefty EU antitrust fine by offering customers reduced prices for Office products excluding Teams.

Tesla jumped 7.4% after board chair Robyn Denholm dismissed concerns that CEO Elon Musk's political activity had hurt sales at the electric-vehicle maker and said the billionaire was "front and centre" at the company following several months at the White House. With Friday's surge, Tesla shares remain down 2% in 2025.

Declines in Goldman Sachs and paint-maker Sherwin-Williams kept the Dow Jones Industrial Average in negative territory. The S&P 500 dropped marginally.

The University of Michigan's survey showed US consumer sentiment fell for a second straight month in September as consumers saw rising risks to business conditions, the labour market and inflation.

The S&P 500 declined 0.05% to end the session at 6,584.29 points. The Nasdaq gained 0.45% to 22,141.10 points, while the Dow Jones Industrial Average declined 0.59% to 45,834.22 points.

Seven of the 11 S&P 500 sector indices declined, led by health care, down 1.13%, followed by a 0.97% loss in materials.

Following signs of a worsening jobs market, interest rate futures reflect expectations of cuts totalling 75 basis points by the end of the year.

For the week, the S&P 500 rose 1.6%, the Dow climbed almost 1% and the Nasdaq added 2%, helped by a revival in artificial intelligence trade after cloud computing giant Oracle's strong forecast on Tuesday.

Warner Bros Discovery jumped 17%, extending a surge from Wednesday, when a source said Paramount Skydance was preparing a bid for the struggling media company.

Shares of vaccine makers fell in the wake of a report saying US health officials are planning to link coronavirus vaccines to the deaths of 25 children. Moderna declined 7.4%, while Pfizer and Novavax both lost more than 3%. Declining stocks outnumbered rising ones within the S&P 500 by a 3.3-to-one ratio.