04:34 PM EDT, 09/13/2024 (MT Newswires) -- US equity indexes rose this week as a bigger, 50 basis-point cut in interest rates next week remained on the table following dovish Fed-speak and August inflation data.

* The Dow Jones Industrial Average ended at 41,393.78 on Friday, compared with 40,345.41 a week ago. The Nasdaq Composite closed at 17,683.98, versus 16,690.83 a week prior. The S&P 500 closed at 5,626.02, compared with 5,408.42 a week earlier. Technology and consumer cyclicals topped the sector charts, led by Broadcom ( AVGO ) , Nvidia ( NVDA ) , and Oracle (ORCL) among the mega-caps.

* The probability of a 50 basis-point cut on Sept. 18 stood at 49% by late Friday afternoon, versus 13% after midday on Thursday, according to the CME Group's FedWatch Tool. The remaining 51% likelihood was for a 25 basis-point drop, versus 87%.

* 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 pointed out news reports in publications such as the Wall Street Journal and the Financial Times highlighting the possibility of a 50 basis-point cut, prompting traders to adjust expectations, a note published on the FXEmpire website said.

* Market speculation and Dudley's comments likely influenced bets for a bigger rate cut as the inflation data this week supported a smaller, 25 basis-point move.

* The hotter-than-expected Producer Price Inflation data and Wednesday's hotter core Consumer Price Index for August, thanks to a larger increase in shelter and airline fares, underscore the Fed's lingering focus on inflation, according to a Stifel note.

* "While continuing a disinflationary trend and supporting the Fed's intentions to open the door to rate cuts in less than one weeks' time, the ongoing uncertainty and unevenness in price growth reinforces the need for a slow and tempered approach to policy adjustment," Stifel Chief Economist Lindsey Piegza said.