By CCN.com: The Dow and broader U.S. stock market advanced on Thursday, as investors found a silver lining in the recent string of downbeat data releases. By this time next week, markets will have a clearer picture of whether the Federal Reserve will indeed lower interest rates at its end-of-July policy meeting.

Dow Rises; S&P 500, Nasdaq Follow

All of Wall Street’s major indexes reported gains on Thursday. The Dow Jones Industrial Average rose by as much as 142 points before backtracking later. It settled up 101.94 points, or 0.4%, at 26,106.77.

The broad S&P 500 Index of large-cap stocks climbed 0.4% to 2,891.64. Seven of 11 primary sectors reported gains, led by energy. Oil stocks rose more than 1% as crude prices staged a major relief rally on Thursday. Shares of communication services and discretionary companies also advanced sharply.

Meanwhile, the technology-focused Nasdaq Composite Index climbed 0.6% to 7,837.13.

Investors Lick Their Chops as Rate-Cut Bets Grow

The likelihood that the Federal Reserve will lower interest rates at its July 30-31 policy meeting has grown to 88.7%, according to CME Group‘s Fed Fund futures prices. The odds could rise substantially or decline after next week’s Federal Open Market Committee (FOMC) meeting, where policymakers could drop some important clues about the direction of interest rates.

Wharton professor of finance Jeremy Siegel recently told CNBC that the Fed should cut interest rates next week. While this is unlikely to happen, officials will probably “put out a directive” that lays the groundwork for a July rate cut.

Siegel believes “the market will be satisfied” with a 25 basis-point reduction in the federal funds rate.

The U.S. central bank will likely resort to slashing interest rates to blunt a growing tide of macro risks ranging from global trade tensions to weak inflation. On Wednesday, the U.S. Department of Labor said consumer prices rose just 1.8% in the 12 months through May, down from 2% the month before. The data set followed a similarly downbeat report on producer prices, which also rose 1.8% year-over-year.

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