Historic Week: Dow Climbs After Major Federal Reserve Decision
The Nasdaq Composite climbed to a new record on Friday, wrapping up a strong week driven by the Federal Reserve's significant interest rate cut—the first major easing in four years.
The tech-heavy index rose 120.45 points, or 0.67%, to close at 18,025.48. Meanwhile, the S&P 500 slipped 0.15%, ending at 5,706.20, while the Dow Jones gained 38.17 points, finishing at 42,063.36. Earlier in the week, the Dow surpassed 42,000, and the S&P 500 broke the 5,700 mark for the first time.
All three major indices posted weekly gains: the S&P 500 increased by 1.36%, marking its fifth positive week in six, with an impressive rise of over 19% in 2024. The Dow saw a weekly gain of 1.62%, and the Nasdaq advanced by 1.49%.
The Fed's unexpected half-point interest rate cut announced on Wednesday prompted a rally as investors shifted their focus to tech stocks like Nvidia and other beneficiaries of lower rates, including Home Depot.
Fed Governor Christopher Waller shared his insights on CNBC, noting that inflation is declining more rapidly than anticipated, which supported his backing of the rate cut. “Investors saw this aggressive move as a positive catalyst,” remarked Nationwide’s chief of investment research, Mark Hackett.
“The Fed successfully conveyed that this substantial cut is aimed at sustaining economic momentum rather than merely reacting to current conditions. The robust market response reflects strong investor confidence in the Fed’s approach,” Hackett added.
However, FedEx's announcement of a lowered earnings outlook slightly dampened market sentiment, causing its shares to tumble over 15%, while competitor UPS dropped 2.7% in response.