Dow Achieves Fourth Consecutive Weekly Win as Data Suggests September Rate Cut Possibility

Investing.com – The Dow Jones Industrial Average experienced a rally on Friday, marking its fourth consecutive weekly gain. This uptrend was bolstered by positive quarterly earnings reports from various corporations and data indicating a slowdown in inflation, which heightened expectations for an interest rate cut in the near future.

As of 4:00 PM ET, the Dow surged by 654 points, or 1.6%. The S&P 500 and the Nasdaq both climbed by 1.1%, with these two indexes experiencing back-to-back weekly losses for the first time since April.

### Cooling Inflation Data Raises Prospects for September Rate Cut

The U.S. Federal Reserve’s preferred measure of inflation rose by 0.1% on a month-to-month basis in June and 2.5% year-over-year, both numbers meeting expectations.

Although the upcoming Federal Open Market Committee (FOMC) meeting next week is deemed too soon for an interest rate cut, analysts at Macquarie suggest that the Fed is likely to signal potential cuts beginning in September.

Macquarie stated, “We expect the FOMC to keep the federal funds rate unchanged next week, but anticipate communication that hints at rate cuts on the horizon.”

### Treasury Yields Decline on Rate-Cut Optimism, Boosting Tech Stocks

The prospect of interest rate cuts contributed to lower Treasury yields, which encouraged renewed interest in technology stocks that had recently struggled.

This buying interest comes just ahead of earnings reports from major tech companies, including Microsoft and Apple, set to be released on Tuesday and Thursday, respectively. Microsoft’s results are expected to draw significant attention as investors look for insights into how its cloud business, Azure, is benefiting from the artificial intelligence trend.

According to UBS, key points of interest for investors will include capital expenditure trends, the return on Microsoft’s AI investments, and the growth of its Office products, particularly when it comes to the Copilot feature offsetting any deceleration in user growth.

Reports from Advanced Micro Devices, Qualcomm, and Amazon are also anticipated in the coming week.

### 3M Experiences Record Rally After Strong Earnings; Bristol-Myers Squibb and Deckers Also Post Impressive Results

3M Company shares skyrocketed nearly 23% to achieve record highs following the company’s decision to raise the low end of its full-year adjusted profit forecast. This increase is attributed to expected benefits from restructuring efforts and rising demand in the electronics sector.

Bristol-Myers Squibb shares rose by 11% after the pharmaceutical giant exceeded expectations with its second-quarter results. This growth was driven by the success of new products, such as the anemia treatment Reblozyl and the heart medication Camzyos, alongside sales of its leading blood thinner, Eliquis.

Deckers Outdoor saw its stock price increase by over 6% after raising its annual profit forecast in light of positive first-quarter results.

Conversely, DexCom shares plummeted by 41% after the medical device maker lowered its annual revenue forecast, citing fewer new customers than anticipated.