MARKET SNAPSHOT

U.S. stocks gained and Treasury's rallied -- pushing two-year yields to their lowest closing level in two years -- as traders considered the possibility of a 50-basis-point rate cut by the Federal Reserve. The dollar fell amid rate-cut expectations, which helped gold rise to yet another record close. Oil futures slipped on continued concerns over demand.

MARKET WRAPS

EQUITIES

The chances of the Federal Reserve kicking off its easing campaign next week with a larger 0.5 percentage-point cut in interest rates have picked back up.

The S&P 500 closed 0.5% higher and 2% above its 50-day moving average. The Nasdaq Composite climbed nearly 0.7% and the Dow Jones Industrial Average climbed 0.7%.

A traditional 0.25-point cut to benchmark rates had previously been seen as the most likely outcome of Wednesday's Fed meeting. Betting has been volatile, however, after a strong readout on core monthly inflation was followed by a softer report on producer-price data.

On Friday, the first of two readings in the consumer-sentiment index crept up to 69.0 in September from 67.9 in August, according to the University of Michigan.

In Asian trading, Chinese shares ended mostly ower, led by losses in consumer-related stocks. Software stocks were also broadly lower.

The benchmark Shanghai Composite Index fell 0.5%, the Shenzhen Composite Index declined 1.1%, and the ChiNext Price Index slipped 1.1%. Hong Kong's Hang Seng Index rose about 0.8%, however, supported by pharmaceutical and consumer stocks.

Japan's Nikkei 225 ended 0.7% lower as a sharply stronger yen raised concerns over Japanese exporters' earnings overseas.

Australia's S&P/ASX 200 rose 0.3%, closing just short of a record amid strength in gold and iron-ore stocks. For the week, the index rose 1.1%

New Zealand's NZX-50 closed 0.1% higher, edging to a fresh 32-month high. Aged-care and real-estate stocks helped round out a 1.7% weekly rise.

COMMODITIES

Oil futures finished with a loss as concerns about the demand outlooked lingered.

West Texas Intermediate crude for October delivery fell 0.5% to settle at $68.65 a barrel. November Brent crude also lost 0.5% to $71.61 a barrel.

Weakness in China's economy is a "major concern, which puts the weekend's release of industrial data from the world's second largest economy [China] into focus," said Fawad Razaqzada, market analyst at City Index and FOREX.com. Baker Hughes reported that the number of active U.S. rigs drilling for oil was up by five at 488 this week, suggesting an upcoming rise in production.

Front-month December gold futures rose 1.2% to a fresh record of $2,581.30 an ounce.

Many analysts are now calling for a higher upside for gold prices than initially forecast. "Today's market action suggests a new upward leg for gold prices is underway," said Peter Cardillo of Spartan Capital Securities. Higher gold prices stem from the belief that a rate cut is coming next week -- making non-interest bearing assets more attractive.

TODAY'S TOP HEADLINES

Consumer sentiment climbs to 4-month high as inflation eases. But Americans still pessimistic.

The rise in sentiment is the highest since May.

The numbers: Consumer sentiment rose to a four-month high in September, just ahead of the U.S. presidential election, as expectations about future inflation fell to the lowest level since 2020. Yet Americans are still "guarded" in their views about the economy.

The first of two readings this month in the consumer sentiment index crept up to 69.0 this month from 67.9 in August, the University of Michigan said Friday.

Import prices decline and add to picture of waning U.S. inflation

The numbers: The cost of imported goods fell in August, the latest in a series of tame inflation readings that have primed the Federal Reserve to cut interest rates next week.

The import-price index dropped 0.3% last month. Economists polled by the Wall Street Journal had forecast a 0.2% decline.

Lower gasoline prices were largely responsible for the negative print. Yet even if energy is excluded, import prices fell 0.1% last month, the government said.

Biden Takes Aim at China's Temu and Shein With Trade Crackdown

The Biden administration will restrict the use of a trade provision that lets China-founded e-commerce giants such as Temu and Shein more easily ship to the U.S., a move that comes amid a groundswell of bipartisan pressure to close what critics regard as a loophole.

The administration said Friday it will take executive action to try to stop a surge in trade under what is known as the de minimis exemption.

The administration said under a new rule it intends to propose, parcels containing merchandise that would be subject to tariffs under various sections of trade law won't be eligible for de minimis treatment. About 70% of Chinese textile and apparel shipments are covered by those tariffs and now will have to go in through a more formal entry method, administration officials said.

Boeing Union Goes on Strike, Halting 737 Production

SEATTLE-Boeing's biggest labor union went on strike, halting production of its bestselling jets and dealing the latest blow to the struggling aerospace giant.

Thousands of machinists who build Boeing's 737, 777 and 767 jets walked off the job shortly after midnight Pacific time Friday, after rejecting a labor deal struck between the union's leaders and Boeing's executives. The contract offered 25% wage increases over four years.

Union leaders of the 33,000-member International Association of Machinists and Aerospace Workers chapter said about 94% of their members voted to reject the contract and 96% voted to go on strike. The officials said they would seek to return to the negotiating table with the company.

PwC China Hit With Six-Month Ban Over Evergrande Crisis

China's finance ministry and securities regulator imposed record fines and a six-month suspension on PricewaterhouseCoopers's operation in the country over its audits of China Evergrande Group, the real-estate developer whose collapse in late 2021 jump-started the country's property crisis.

The $62 million in fines, handed down by regulators Friday, was the country's largest-ever penalty imposed on a Big Four accounting firm. It is also the first major penalty levied against an auditor related to China's real-estate collapse.

In addition, PwC's operations in mainland China will be suspended for six months and its Guangzhou office was shut down by the finance ministry. The suspension effectively freezes the firm out of the audit-busy months of January to April, making it impossible to sign off on companies' annual reports during that period.