01:22 PM EDT, 09/13/2024 (MT Newswires) -- US equity indexes rose while most government bond yields declined in midday trading Friday after bets in favor of a 50 basis-point cut in interest rates next week surged.

The S&P 500 index rose 0.6% to 5,631.3, with the Nasdaq Composite up 0.7% to 17,701.1 and the Dow Jones Industrial Average 0.8% higher at 41,436.5. All sectors rose intraday, with materials and utilities leading the top gainers.

The Federal Reserve's monetary policy announcement is due Sept. 18. The probability of a 50 basis point cut in rates surged to 43% after midday Friday from 13% on Thursday afternoon, according to the CME Group's FedWatch Tool. The remaining 57% likelihood was for a 25 basis point cut, down from 87% over the same comparable period.

Speaking at a forum in Singapore, former New York Fed President Bill Dudley said that "there's a strong case for 50," Reuters reported. Analysts from Deutsche Bank noted news reports in publications such as The Wall Street Journal and the Financial Times highlighted the possibility of a 50 basis point cut, prompting traders to adjust expectations, a note from FXEmpire said.

Most Treasury yields fell intraday, with the 10-year yield down 3.2 basis points to 3.65%, and the two-year rate was 6.8 basis points lower at 3.58%.

Gold jumped 1.2% to $2,612.40 an ounce, and silver surged 3.5% to $31.16.

Meanwhile, in economic news Friday, the University of Michigan's preliminary consumer sentiment index rose to 69 in September from 67.9 in August, above the expectations for an increase to 68.5 in a survey compiled by Bloomberg.

While the September consumer sentiment print is the strongest since May, the index peaked in March at 79.4. "The steep decline since then is concerning," according to a note from Jefferies.

Respondents in the Michigan survey saw one-year inflation expectations at 2.7%, the lowest since December 2020, and down from 2.8% in August. The five-year inflation expectations rose to 3.1% after holding at 3% in the previous five months.

Separately, US import prices fell 0.3% in August, below the 0.2% slide anticipated in a survey compiled by Bloomberg, and a 0.1% increase in July. Export prices fell 0.7% in August, below expectations for a 0.2% drop and a 0.5% increase in July.

In company news, Adobe (ADBE) shares sank 9% intraday, the worst performer on the S&P 500 and the Nasdaq, after the firm's Q4 revenue outlook missed market expectations. After the results late Thursday, Fubon downgraded Adobe to neutral with a price target of $610. Citigroup lowered its price target to $616 from $621 and Bernstein to $644 from $660.

West Texas Intermediate crude oil futures traded little-changed at $68.96 a barrel.