After rallying on Thursday in the wake of a 50 basis points interest rate cut by the Federal Reserve, the U.S. stocks gave up some of their gains on Friday. However, all major indexes still managed to finish in the green, with the blue chip Dow Jones Industrial Average notching another record close.
After closing at 42,025.19 points on Thursday, Dow Jones edged higher on Friday, improving by 0.1% or 38.17 points to end the day at an all-time high close of 42,063.36. Overall, the Dow gained 1.52% over the course of the week.
Benchmark S&P 500 also cleared another record on Thursday but didn’t extend its gains to the next day. It fell down by 0.2% or 11.09 points to close at 5,702.55 points for a 1.56% weekly gain.
Nasdaq Composite also gave up some ground, falling by 65.66 points or 0.36% to close at 17,948.32. The tech-heavy index is up 2.13% for the week.
The stock market reacted positively to the rate cuts as expected, and now experts predict that the rally will continue in the coming weeks.
“The combination of Fed easing and a soft landing should prove to be a tailwind for risk assets (equities in particular). Historically, Fed easing cycles have been positive for the equity market. In fact, the S&P 500 has been up ~5% on average in the 12 months following the Fed’s first cut,” Larry Adam, CIO at Raymond James, wrote in a note sent to clients.