Wall Street's main stock indices rose on Friday, rebounding from sharp losses in the previous session, as investors assessed a set of economic data releases to gauge the Federal Reserve's interest rate outlook, while the Middle East conflict widens.
A Commerce Department report showed economic growth slowed more sharply than initially thought in the fourth quarter following downward revisions to consumer spending and business investment, while a separate report showed consumer spending increased slightly more than expected in January.
The data did little to shift expectations for the Fed's policy path as traders priced in one 25-basis-point interest rate cut later this year, according to LSEG-compiled data, compared with two cuts expected before the war began on February 28.
"Inflation remains elevated, sticky and with the possibility of energy prices eventually moving into the pipeline, the Fed is likely to stay on hold for a longer period of time," said Peter Cardillo, chief market economist, Spartan Capital Securities.
The Fed will potentially leave interest rates unchanged when it meets next week and spiking energy costs could complicate the central bank's policy plans as other reports point to price pressures and a softening job market.
Meanwhile, data showed the University of Michigan's preliminary estimate on consumer sentiment edged lower in March to 55.5 from 56.6 in late February.
Crude prices hovered near US$100 a barrel as hostilities in the Middle East showed few signs of easing despite the Trump administration's assurances of a swift resolution.
Efforts such as the International Energy Agency's record emergency oil releases, and the US 30-day license for countries to buy Russian oil and petroleum products stranded at sea have so far failed to bring down the surge in costs.
At 10:10am ET, the Dow Jones Industrial Average rose 197.09 points, or 0.42%, to 46,874.94, the S&P 500 gained 28.78 points, or 0.43%, to 6,701.40 and the Nasdaq Composite gained 89.51 points, or 0.40%, to 22,401.49.
Wall Street's fear gauge, the CBOE volatility index, wavered and was last down 1.8 points at 25.37, while futures tied to the rate-sensitive Russell 2000 index were up 0.6%.
All of the 11 S&P 500 sectors edged higher, with utilities leading with a 1.4% rise.
The S&P 500 and the financials-heavy Dow were set for their third week in the red with the latter hit the hardest, putting it on track for its biggest monthly losses since December 2024.
Credit quality worries deepened this week after Morgan Stanley halted redemptions at one of its private credit funds, following similar moves by BlackRock and Blue Owl in recent weeks.
JPMorgan Chase also restricted lending to private credit players, while Blackstone faced a surge in redemptions.
Blue Owl and BlackRock edged up 1.6% each following sharp losses in the previous session.
Travel stocks, hit the most by the war and higher energy costs, were mixed.Alaska Airlines was flat and American Airlines slipped 0.6%, while Carnival and Norwegian Cruise rose 2.7% and 1.5%, respectively.
Design software maker Adobe fell 6.5% as longtime CEO Shantanu Narayen will leave his role once a successor is appointed, renewing worries around its strategy as it grapples with AI disruption.
Crypto-firm Strategy climbed 4.7% as bitcoin prices rose more than 4%.Megacap Meta slipped 1.8% as a report said it postponed the release of its artificial intelligence model "Avocado" to at least May, from this month.
Advancing issues outnumbered decliners by a 2.17-to-1 ratio on the NYSE and by a 1.81-to-1 ratio on the Nasdaq.
The S&P 500 posted nine new 52-week highs and four new lows while the Nasdaq Composite recorded 25 new highs and 79 new lows.
-The Edge Malaysia