The S&P 500 advanced on Friday, trading close to record highs following the Federal Reserve’s first interest rate cut since December.
At 1:16 p.m. ET (17:16 GMT), the Dow Jones Industrial Average added 129 points, or 0.3%. The S&P 500 climbed 0.3%, while the NASDAQ Composite gained 0.4%.
On Thursday, the Dow, S&P 500, and NASDAQ all closed at new record levels as investors continued to digest the Fed’s latest policy shift. All three indexes are on track to finish the week up around 1%.
Fed cut boosts Wall Street sentiment
The Fed’s decision on Wednesday to reduce its benchmark interest rate by 25 basis points, lowering the range to 4.00%–4.25%, has lifted investor confidence.
The move, aimed at supporting a cooling labor market, came with projections for two more cuts this year and another in 2026. Fed Chair Jerome Powell described the move as a “risk-management cut” and emphasized that future adjustments would depend on incoming economic data.
Analysts at Vital Knowledge noted that markets are celebrating a combination of stimulus from both fiscal and monetary policy, with the ongoing AI-driven stock momentum adding to the bullish sentiment.
Trump–Xi call to focus on TikTok
On the political front, President Donald Trump is set to speak with Chinese President Xi Jinping on Friday. A potential agreement over TikTok’s future in the U.S. is expected to be a key discussion point.
The call marks their first direct contact in three months and could set the stage for an in-person meeting at a South Korea summit later this year. For TikTok, owned by China’s ByteDance, such an agreement could resolve months of uncertainty surrounding its U.S. operations.
Corporate earnings in focus
FedEx (NYSE: FDX) reported better-than-expected quarterly earnings and revenue, helped by cost-cutting measures that offset weaker international volumes. Revenue reached $22.24 billion, above the $21.66 billion estimate, while adjusted profit came in at $912 million. Executives highlighted that the end of a tariff exemption cut $150 million from revenue.
In contrast, homebuilder Lennar (NYSE: LEN) posted a 46% drop in quarterly profit. Rising inflation has dampened housing demand, while incentives such as mortgage rate buydowns have supported sales but reduced profit margins.
Apple (NASDAQ: AAPL) shares rose after JPMorgan increased its price target from $255 to $280, citing strong demand for the new iPhone 17. Long lines were seen at Apple’s flagship Beijing store during launch day.
Meanwhile, Intel (NASDAQ: INTC) slipped after a 22% surge on Thursday, which followed Nvidia’s $5 billion investment announcement in the chipmaker.
