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Adobe tumbles after forecasting Q4 earnings below

estimates

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Russell 2000 small cap index outperforms

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Indexes up: Dow 0.84%, S&P 500 0.56%, Nasdaq 0.64%

(Updated at 11:33 a.m. ET/1533 GMT)

By Shashwat Chauhan and Purvi Agarwal

Sept 13 (Reuters) - Wall Street's main indexes rose on

Friday as investors reevaluated the possibility of a bigger

interest rate cut by the Federal Reserve next week, while

Photoshop maker Adobe tumbled after forecasting fourth-quarter

earnings below estimates.

Traders' bets of a 50-basis point rate cut jumped overnight,

now standing at 43% compared with 14% on Thursday, CME's

FedWatch Tool showed.

Former New York Fed President Bill Dudley said there was a

strong case for a 50-bps interest rate cut. Separate media

reports calling the decision "a close call" also added to the

uncertainty.

"A couple of articles were published in the Wall Street

Journal and the Financial Times suggesting that a 50-bps move

was still in play, which has led markets to once again

reevaluate their expectations," Deutsche Bank analysts said.

The Russell 2000 small cap index, which tends to

benefit in a lower-rate environment, outperformed with a 2.2%

jump.

The market has been seeing a reversal in U.S. equity

positioning over the past three days and investors are going

long heading into the Fed meeting, said Michael James, managing

director of equity trading at Wedbush Securities.

Bets of the Fed sticking to a smaller 25-bps cut had firmed

on Thursday following a slightly higher producer prices report

that followed the August consumer prices data.

All 11 S&P 500 sectors edged higher on Friday, led by a 1.2%

rise in materials stocks that tracked an increase in

the prices of precious metals.

Meanwhile, a survey showed U.S. consumer sentiment improved

in September amid subsiding inflation, though Americans remained

cautious ahead of the November presidential election.

All the three major U.S. benchmark indexes were trading near

a two-week high, on track to log solid weekly gains.

The Dow Jones Industrial Average rose 343.71 points,

or 0.84%, to 41,440.48, the S&P 500 gained 31.29 points,

or 0.56%, to 5,627.15 and the Nasdaq Composite gained

112.80 points, or 0.64%, to 17,682.47.

The Philadelphia SE Semiconductor index rose 1.4% to

levels last seen on Sept. 2, with most chip stocks trading

higher.

Among individual movers, Boeing ( BA ) pared losses and was

last down 0.5% as its U.S. West Coast factory workers walked off

the job early on Friday after overwhelmingly rejecting a

contract deal.

Adobe slid 9.3% to a one-month low after

forecasting fourth-quarter earnings below analysts' estimates,

while Oracle jumped 2.7% after the cloud computing

company raised its fiscal 2026 revenue outlook.

Chinese e-commerce firm PDD Holdings ( PDD ) lost 2.3% after

the Biden administration said it was moving to curb low-value

shipments entering the U.S. duty-free under the $800 "de

minimis" threshold.

Uber ( UBER ) gained 4.9% after the ride-hailing platform

said it would bring autonomous ride hailing to Austin, Texas,

and Atlanta, in partnership with Alphabet's Waymo.

Advancing issues outnumbered decliners for a 6.71-to-1 ratio

on the NYSE and a 3.62-to-1 ratio on the Nasdaq.

The S&P 500 posted 50 new 52-week highs and no new low,

while the Nasdaq Composite recorded 87 new highs and 36 new

lows.