New York — The S&P 500 and Nasdaq Composite delivered their strongest performances of the year, closing Friday on a high note as investors continued to speculate about a potential half-point interest rate cut by the Federal Reserve.
The S&P 500 climbed 0.5% on Friday, ending the week with a substantial 4% increase. The Dow Jones Industrial Average also saw a notable gain, rising nearly 300 points, or 0.7%. Meanwhile, the Nasdaq Composite gained 0.7%, marking its best weekly performance of 2024.
Small-cap stocks outperformed their larger counterparts, with the Russell 2000 surging 2.5% on the final trading day of the week.
This week’s positive economic data has kept market expectations for a significant rate cut alive. Speculation about a half-point reduction was reignited on Thursday following a report from The Wall Street Journal, which suggested that Federal Reserve officials were considering a more aggressive rate cut. According to the CME FedWatch Tool, futures markets are currently split nearly evenly between expectations for a 25 basis point cut and a 50 basis point reduction.
The Federal Reserve’s decision, set to be announced on Wednesday, is anticipated to be a pivotal moment for markets. In addition to the rate cut decision, investors will be keenly watching for updates on future rate cuts and insights from Fed Chair Jerome Powell’s press conference.
Bond yields continued their downward trend, with the yield on the 2-year Treasury note falling to its lowest close since 2022 at 3.575%. The 10-year yield also decreased, settling at 3.648%.
As Wall Street braces for the Fed’s announcement, the focus will remain on how the central bank’s actions will impact economic conditions and market sentiment in the months ahead.
Market Indexes:
Dow Jones Industrial Average (DJIA): 41,393.78, up 297.01 points (+0.72%)
S&P 500 (SPX): 5,626.02, up 30.26 points (+0.54%)
Nasdaq Composite (COMP): 17,683.98, up 114.30 points (+0.65%)