US stocks meandered on Friday as Wall Street took stock of the US economy from a lofty, record-setting perch ahead of the Federal Reserve's highly anticipated decision on interest rates next week.

The Dow Jones Industrial Average (^DJI) edged down more than 0.1%, while the S&P 500 (^GSPC) slipped below the flat line. The tech-heavy Nasdaq Composite (^IXIC) inched up 0.1%. All three major indexes rallied to records on Thursday, with the Dow closing above 46,000 for the first time.

Investors have taken in several weeks' worth of economic data to gain clues on the Fed's next move. Over the last week, jobs data has shown clear signals of labor market weakness, with just over 20,000 jobs added last month and weekly initial jobless claims surging to a near four-year high.

Meanwhile, inflation remains stubborn, with consumer prices rising last month amid more signs that President Trump's tariffs are filtering their way into the economy. But investors are betting inflation is tame enough for the Fed to cut next week — and then some.

Traders are pricing in a more than 90% chance of a quarter-point cut when the Fed holds its September meeting, according to CME Group. Beyond that, around 75% are betting the central bank to cut the equivalent of three times before the end of the year.

Read more: The latest on Trump's tariffs

The lead-up to the Fed's September meeting in the next few days will likely be quieter. But Friday brings an initial reading of consumer sentiment this month from the University of Michigan. Though most signals point to consumer spending holding steady, Americans are souring on their purchasing power — and on the job market as a whole.

For now, the three major stock indexes are all headed for weekly gains of over 1.4%. The Dow was on track for its first win in three weeks after crossing 46,000 for the first time, while the S&P 500 and Nasdaq Composite are set for their best showing since early August.

US stocks were muted on Friday at the open as Wall Street looked ahead to the Federal Reserve's highly anticipated decision on interest rates next week.

The Dow Jones Industrial Average (^DJI) fell more than 0.1%, while the S&P 500 (^GSPC) sank below the flat line. The tech-heavy Nasdaq Composite (^IXIC) edged up 0.1%. The three gauges meandered after rallying to records on Thursday, with the Dow closing above 46,000 for the first time.

The three major stock indexes are all headed for weekly gains of over 1.4%, with the Dow set for its first win in three weeks.

Now, investors are looking ahead to the University of Michigan's Survey of Consumer Sentiment for September at 10 a.m. EST for a look at Americans' inflation expectations.

Gemini Space Station, a crypto exchange founded by Tyler and Cameron Winklevoss, is set to go public on Friday to cap a week of IPO activity.

The company priced its initial public offering at $28 per share on the Nasdaq late on Thursday, putting Gemini's valuation at $3.3 billion. According to Reuters, the IPO was 20 times oversubscribed, indicating strong demand for crypto companies. The stock will begin trading under the ticker GEMI.

Meanwhile, shares of blockchain platform Figure Technology Solutions (FIGR) are set to begin their second day of trading by taking a leg lower. The stock, which opened at $25 per share on Thursday, spiked as much as 48% in initial trading and closed the day 24% higher at $31 per share.

Figure raised $787.5 million in its IPO, valuing the company at $5.3 billion. In an interview with Yahoo Finance's Brian Sozzi, Figure co-founder Mike Cagney explained why there's market excitement around crypto and how it's disrupting financial markets.

Buy now, pay later firm Klarna (KLAR), which debuted on the public markets on Wednesday, was up 2.5% in premarket trading on Friday after a down day on Thursday. The stock closed its first day of trading 16% higher and its IPO raised $1.37 billion.

Luxury furniture maker RH (RH) cut its annual outlook on Thursday, warning of the toll tariffs are having on the industry. The stock fell 9% in premarket trading.

\\"There's going to be gross margin headwinds from tariffs coming,\\" CEO Gary Friedman said on the earnings call. \\"You just can't raise prices fast enough, and there's only so much room our manufacturing partners have [to absorb costs].\\"

Friedman said that tariff uncertainty led the company to delay a new brand extension and its Fall Interiors Sourcebook.

As a result, RH said it expects a $30 million hit to profits in the second half of the year. The company also lowered its full-year revenue growth outlook to 9% to 11% from 10% to 13% previously.

Earnings per share of $2.62 missed Wall Street estimates of $3.25 per share. Revenue also missed: $899 million compared to $905 million estimated.

Year to date, RH stock has faced significant pressure and is down 42%.

Despite notable tariff-fed jumps in prices, the Fed is preparing to cut rates next week. Jerome Powell has signaled it. Markets are pricing it in. And the reason isn’t inflation. It’s jobs, Yahoo Finance's Allie Canal says in today's Morning Brief.

Allie reports:

Suddenly, the \\"solid\\" economy Fed officials were touting just months ago doesn't look so solid anymore.

For Powell & Co., this creates a tricky balancing act. Move too soon (or too much), and policymakers risk fueling inflation just as tariffs push prices higher. Act too slowly (or not enough), and cracks in the labor market could deepen, tipping the economy closer to recession — the dreaded stagflation mix.

It’s a delicate dance and history shows the Fed doesn’t always get the timing right — as President Trump frequently likes to remind our Fed chair.

Investors are split on how to read it — if you ask them. Retail sentiment looks downright gloomy. Just 28% of investors called themselves bullish in the latest AAII survey, while nearly 50% are bearish, the most pessimistic reading since the April tariff announcements.

On the other hand, if you don't ask them but watch them, investors have handed the market yet another series of record highs. ...

In other words, Main Street could be bracing for more pain, while Wall Street’s positioning still looks stretched.

Read more here.

From Bloomberg:

The Russell 2000 (^RUT), home to some of the riskiest stocks on the market, has been on a tear — and a spate of Wall Street strategists say the rally is just getting started.

The gauge of small cap stocks has jumped almost 10% since the end of July, doubling the advance by the S&P 500. A bottom-up aggregation of price targets shows analysts expect the run of outperformance to continue over the next year. They see the potential for a 20% advance in the Russell 2000, compared with calls for an 11% jump in the S&P 500, according to data compiled by Bloomberg.

The call is a bold one, going by recent history. Small caps have lagged behind bigger companies every year since 2020, and even after the latest surge still trail the S&P 500 in 2025. The logic behind the prediction is that expected Federal Reserve rate cuts will lower borrowing costs for companies in the Russell 2000 enough to meaningfully boost margins. The analysts expect the bull market in US stocks, powered so far mostly by large caps, to broaden to smaller companies as Fed easing supports a still-strong economy.

Russell 2000 futures (RTY=F) were down slightly in premarket trading, but the index is up nearly 20% in the past six months.

Read more here.

Economic data: University of Michigan sentiment (September preliminary)

Earnings calendar: No notable earnings.

Here are some of the biggest stories you may have missed overnight and early this morning:

Jobs now matter more than inflation, even as tariffs bite

Trump's tariff revenue just hit another monthly record

China warns Mexico: 'Think twice' about US-friendly tariff hikes

OpenAI, Microsoft reach early deal on shift to for-profit

Wall Street expects rally in riskiest stocks to last 12 months

Fed's fear meter may be signaling stagnation, not stagflation

Paramount-Warner deal faces these huge hurdles

Coffee, beef surge: Here's the latest inflation breakdown

Tesla pivots to robots amid doubts about sales, valuation

Swatch sells watch lampooning Trump's 39% tariffs on Switzerland

Here's a look at some of the top stocks trending in premarket trading:

Super Micro Computer Inc. (SMCI) stock rose 5% before the bell on Friday. The company announced on Thursday that it had begun delivering high-volume Nvidia HGX B300 systems and Nvidia GB300 NVL72 in volume to customers worldwide.

Microsoft (MSFT) stock rose 1% in premarket trading following the news that it had signed a non-binding deal with OpenAI (OPAI.PVT) for new relationship terms that would allow OpenAI to proceed to restructure itself into a for-profit company.

RH (RH) shares fell 10% before the bell after the luxury furniture retailer met Wall Street revenue expectations for its second-quarter results. But next quarter's revenue guidance was less impressive, coming in 2% below analysts estimates.

Opendoor (OPEN) shares continue to be in focus after the online real-estate platform somehow nabbed a top executive from Shopify (SHOP) — Kaz Nejatian — to become its new CEO this week.

That has caught the eye of JP Morgan analyst Dae Lee, who is overweight rated on the stock.

Lee says:

\\"We believe Nejatian’s tech-driven background, along with renewed founder involvement, positions Opendoor to sharpen product focus and execution as it navigates ongoing housing market challenges.\\"

I recently caught up with my long-time contact Eric Jackson over at EMJ Capital on Opendoor. He got the stock pushed into meme stock land by becoming very vocal on X about how the company is being severely undervalued.

Worth a watch below.

Warner Bros. Discovery (WBD) stock is up another 4% in premarket after its 29% surge on Thursday, following news that Paramount Skydance (PSKY) is preparing a bid for the company.

I wouldn't rule out a potential bidding war for Warner Bros. Discovery. Good point this morning on this from MoffettNathanson analyst Robert Fishman:

\\"The good news for WBD and its shareholders is that there are a number of different potential dance partners for either the whole company or its valuable pieces that could still lead to some competition for PSKY.

Consider Comcast (CMCSA), who we’ve argued is another plausible bidder for Warner Bros. after the split. The strength of their combined studios and streaming platforms, plus the opportunity to monetize Warner Bros. I.P. with Universal Theme Parks and the potential for cost synergies between Versant and WBD’s cable network portfolio, further underscores the strategic logic of such a pairing.

But would Comcast be willing to enter a bidding war for the full company while also bearing the added uncertainty of regulatory scrutiny? Any effort to acquire WBD could also jeopardize the tax-free status of Comcast’s planned Versant spin-off, and could therefore potentially require scuttling the separation altogether, at least temporarily. These considerations could end up keeping Comcast on the sidelines.\\"

Shares in Adobe (ADBE) stepped higher in premarket after the Photoshop maker gave an upbeat revenue forecast for the quarter through November.

The outlook suggested that Adobe is starting to see a payoff from adding AI features to its software tools.

Bloomberg reported:

Sales will be about $6.08 billion to $6.13 billion in the period running through November, the company said Thursday in a statement. Analysts, on average, estimated a number at the bottom of that range.

Profit, excluding some items, will be $5.35 to $5.40 a share, compared with the average projection of $5.33. The San Jose, California-based company also boosted its annual forecast.

Adobe has worked to weave artificial intelligence features, often based on its own generative models, into the company’s industry-standard products like Photoshop. That’s now helping spur growth.

Annual recurring revenue from AI-influenced products has surpassed $5 billion, Chief Executive Officer Shantanu Narayen said in the statement. “Adobe is the leader in the AI creative applications category,” he said.

Read more here.

Gold (GC=F) tracked its trajectory for four weeks of consistent gains as rate-cut bet fervour spread from investors to institutions, with bullion-backed ETFs moving heavily toward the haven asset.

Bloomberg reports:

Bullion rose above $3,650 an ounce, up almost 2% this week, after setting a record in Tuesday’s session. Silver, which can move in tandem, topped $42 an ounce to hit the highest since 2011. On Thursday, data showed US consumer prices rose as expected in August, handing Fed policymakers the leeway to reduce borrowing costs after a string of weak labor-market prints.

Traders have priced in at least one quarter-point cut at the Fed’s meeting next week, and possibly two more by the end of the year. The US dollar and 10-year Treasury yields have lost ground this week. Lower borrowing costs, falling yields, and a weaker greenback typically benefit the precious metal.

Read more here.

Bloomberg reports:

OpenAI said it’s closer to converting into a more traditional for-profit company — nearing the resolution of painful negotiations with top shareholder Microsoft Corp. and outlining terms of at least $100 billion in equity for its nonprofit arm.

Planned changes will give the existing OpenAI nonprofit control over a new public benefit corporation, Chairman Bret Taylor said in a statement Thursday. And it would provide the nonprofit with an equity stake that would make it “one of the most well-resourced philanthropic organizations in the world,” he wrote.

“OpenAI started as a nonprofit, remains one today, and will continue to be one — with the nonprofit holding the authority that guides our future,” Taylor said in the statement.

OpenAI plans to give the nonprofit an equity stake of more than $100 billion in the new corporation, which is a floor that could increase, according to a person familiar with the matter who asked not to be identified because the information is private.

That stake would give the company a roughly 20% share of OpenAI — if it closes a deal to let employees sell shares at a valuation of $500 billion. That transaction would make OpenAI the biggest startup in the world.

Read more here.