US STOCKS-S&P 500 and Nasdaq hit records, traders look to Fed meeting

By Noel Randewich and Ragini Mathur

Sept 12 (Reuters) - The S&P 500 and the Nasdaq climbed to record highs on Friday, lifted by Microsoft, as investors looked ahead to the Federal Reserve's policy meeting next week, when it is widely expected to cut interest rates to counter a slowdown in the jobs market.

The Dow Jones Industrial Average dipped, while the S&P was up marginally following a rally in the previous session that saw all three indexes hit all-time highs.

Investors are laser-focused on the Fed's meeting on Tuesday and Wednesday. Traders expect the central bank to cut interest rates by 25 basis points after recent data showed longstanding weakness in hiring and easing inflation concerns.

"Because we had such a nice jump in the stock market yesterday, investors are basically catching their breath," said Sam Stovall, chief investment strategist CFRA Research. "There's really not going to be any data between now and Wednesday. It's a sort of wait-and-see attitude."

Microsoft MSFT.O gained 2.1% after the technology giant avoided a possible hefty EU antitrust fine by offering customers reduced prices for Office products excluding Teams.

Tesla TSLA.O jumped almost 7% after board chair Robyn Denholm dismissed concerns that CEO Elon Musk's political activity had hurt sales at the electric-vehicle maker and said the billionaire was "front and center" at the company after several months at the White House. With Friday's surge, Tesla shares remain down 2% in 2025.

Declines in Goldman Sachs GS.N and paint-maker Sherwin-Williams SHW.N kept the Dow Jones Industrial Average in negative territory.

The University of Michigan's survey showed U.S. consumer sentiment fell for a second straight month in September as consumers saw rising risks to business conditions, the labor market and inflation.

The S&P 500 was up 0.10% at 6,593.81 points.

The Nasdaq gained 0.50% to 22,152.40 points, while the Dow was down 0.41% at 45,919.34 points.

Seven of the 11 S&P 500 sector indexes declined, led lower by materials .SPLRCM, down 0.96%, followed by a 0.78% loss in health care .SPXHC. The S&P 500 technology index .SPLRCT climbed 0.65%.

Following signs of a worsening jobs market, interest rate futures reflect expectations of cuts totaling 75 basis points by the end of the year.

All three major indexes are poised to record weekly gains, with the S&P 500 and Nasdaq lifted by a revival in artificial intelligence trade after cloud computing giant Oracle's ORCL.N strong forecast on Tuesday.

Warner Bros Discovery WBD.O surged 12.5%, extending a surge from Wednesday, when a source said Paramount Skydance PSKY.O was preparing a bid for the struggling media company.

Shares of vaccine makers fell after a report said U.S. health officials are planning to link coronavirus vaccines to the deaths of 25 children. Moderna MRNA.O fell 6.9%, while Pfizer PFE.N and Novavax NVAX.O both fell more than 3%.

Declining stocks outnumbered rising ones within the S&P 500 .AD.SPX by a 2.5-to-one ratio.

The S&P 500 posted 20 new highs and 3 new lows; the Nasdaq recorded 89 new highs and 33 new lows.