The stock set all kinds of records on Friday.
The Standard & Poor’s 500 Index, Dow Jones Industrial Average, Nasdaq Composite Index and Nasdaq-100 all closed at record highs. The Russell 2000 fell slightly but was still up 2.2% on the week.
💵💰Don’t miss the move: Subscribe to TheStreet’s free daily newsletter 💰💵
The gains emerged from hopes that the Federal Reserve will continue to cut interest rates into 2026.
The Fed cut its federal funds rate from 4.25%-to-4.5% to 4% to 4.25%, and Chairman Jerome Powell and the accompanying projections that come with the statement suggested two more cuts are coming this year and more in 2026.
The funds rate is what banks are told to charge one another for overnight loans. It’s the foundation rate for short-term interest rates.
Related: AI lawsuit against Google parent Alphabet highlights growing legal trend
Financial markets are sensing that more rate cuts ahead and not just because Donald Trump wants them. Futures trading in federal funds futures, basically a bet on what will happen, see the federal funds rate below 3% by mid-fall 2026.
That would have a big effect on the economy, leading to lower borrowing rates for businesses and agribusiness and, possibly mortgage rates — and boost Republican chances in the mid-term elections in the process. If inflation doesn’t take off suddenly.
Here’s what else to know from Friday’s market.
A 5-month winning streak
Stocks have risen every month since the April tariff panic, though there remain seven trading days left in September. And the numbers since the bottom of the tariff are even more impressive.
Here’s how the numbers work from the April low:
- S&P 500, up 37.8%
- Dow industrials, up 26.5%
- Nasdaq Composite, up 53.1%
- Nasdaq-100, up 48.9%
- Russell 2000 Index, up 41.3%
The year-to-date numbers offer some perspective on how violent the tariff panic was:
- S&P 500, up 13.3%
- Dow industrials, up 8.9%
- Nasdaq Composite, up 17.2%
- Nasdaq-100, up 17.2%
- Russell 2000 Index, up 9.8%
One other bullish indicator: Initial public offerings are seeing a resurgence this year.
Related: Controversial Fed official drops bold 3-word message
Renaissance Capital, which helps bring companies public and tracks the IPO market, has seen 169 companies go public through August. That’s more than in all of 2024.
One was Pattern Group PTRN, which raised $300 million on Thursday. The shares jumped 11.6% to $15.63 in its first day of trading on Friday.
The big unknowns are whether the newly public companies can justify investor confidence. You may remember 2021 saw a record 397 IPOs, and a good many of those companies crashed and burned. Only 71 companies went public in 2022.
The bond market wishes to put in a word
When the Fed cut its fed funds rate by a half percentage point in the fall of 2024, bond yields surprised by moved higher.
After the Fed announced its newest rate cut on Wednesday, yields went up again.
More Wall Street Analysts:
- Lennar’s margins are the latest warning on housing
- Analysts turn heads with Nvidia rival’s stock target after earnings
- Rare signal to send stock market surging next year, says veteran analyst
- Analysts unveil surprising Dell stock target after slump
The 10-year Treasury yield fell below 4% on Wednesday, then moved up to 4.085% at Wednesday close and reached 4.131% on Friday.
But won’t the bond market follow the Fed to lower rates?
Well, the old saying is “Don’t fight the Fed.”
And the Fed knows the two big risks.
- The dollar is down 10%-plus this year against major currencies.
- Bond traders have been wary about the impacts of President Trump’s big tax bill.
Related: Cracker Barrel CEO outlines path forward after logo controversy
Mixed indicators inside the indexes
Buy even as the S&P 500 set new 52-week and closing highs, the gains were not uniform. The index was led by its technology sector, up 1.2% on the day.
But four sectors ended the day lower: Health Care, Consumer Staples, Real Estate and Energy.
(Tech is also the year’s second-best performer of the 11 S&P 500 sectors, up 19.8% on the year. Tops is Communication Services, up 28.4%, thanks to huge gains for Google parent Alphabet (GOOGL) and Facebook parent Meta Platforms (META) .)
In addition, 212 stocks were higher on the day, led by Paramount Skydance (PSKY) , up 5.85% to $18.92. Losers totaled 287, with Dexcom (DXCM) , maker of glucose monitors, suffering the biggest decline, down 11% to $67.45.
Yes, it’s a good market — but not everything is perfect.
Decliners beat winners on NYSE and Nasdaq
Advancing stocks on the New York Stock Exchange totaled 950 on Friday, but 1,808 stocks fell on the day, with 91 unchanged.
On Thursday, advancers were ahead of decliners. On Nasdaq, advancers were 1,931, with decliners totaling 2,708 with 175 unchanged. Again, advancers beat decliners on Thursday.
Oracle shares soar ahead
Oracle (ORCL) shared jumped 4.1% to $308.75 on Friday, the biggest gain among stocks with the 10 stocks with the highest market capitalizations.
The software giant is 10th with a market cap of $877 billion. This is part of its emergence as a powerhouse in Artificial Intelligence applications.
Microsoft (MSFT) , up 1.9% to $517.93 is closing in again on a $4 trillion value. Its market cap is now 3.85 trillion, not far behind Nvidia’s (NVDA) $4.3 trillion.
Related: Universal Studios Orlando demolishes entire theme park land
