U.S. Stocks Extend Rally, Major Indexes Hit Fresh Record Highs

Wall Street finished higher on Friday, with all three major indexes pushing further into record territory. The gains built on Thursday’s momentum as optimism over interest rates and geopolitical developments kept investor sentiment strong.

Record Closes Across the Board

The Nasdaq jumped 160.75 points (0.7%) to 22,631.48, while the S&P 500 added 32.40 points (0.5%) to close at 6,664.36. The Dow Jones Industrial Average advanced 172.85 points (0.4%) to 46,315.27.

For the week, the Nasdaq led the pack with a 2.2% gain, while the S&P 500 and Dow climbed 1.2% and 1.1%, respectively.

Friday’s rally pushed all three benchmarks to new record highs before slight profit-taking trimmed gains late in the session.

Fed Rate Cuts and Geopolitical Optimism Lift Sentiment

September is historically one of the weakest months for equities, but stocks have bucked the trend so far. The Federal Reserve’s decision on Wednesday to cut interest rates by 25 basis points, while signaling two more cuts later this year, has fueled optimism that monetary easing will support growth.

Investor mood also improved after President Donald Trump described his call with Chinese President Xi Jinping as “very productive.” According to Trump, the two leaders discussed trade, fentanyl, the war in Ukraine, and TikTok’s U.S. operations, signaling progress on multiple fronts.

Still, overall trading volume was lighter than usual, with the absence of major U.S. economic data keeping some investors on the sidelines.

Sector Highlights

• Gold stocks surged after bullion prices strengthened, sending the NYSE Arca Gold Bugs Index up 4.3%.
• Software stocks posted solid gains, with the Dow Jones U.S. Software Index rising 1.8%.
• Energy shares lagged, weighed down by weaker oil prices. The Philadelphia Oil Service Index dropped 2.1%, and the NYSE Arca Oil Index slid 1.5%.
• Housing stocks also pulled back, with the Philadelphia Housing Sector Index falling 1.2%.

Global Markets and Treasury Yields

Overseas markets delivered a mixed picture. Japan’s Nikkei 225 lost 0.6%, and China’s Shanghai Composite slipped 0.3%, while Australia’s S&P/ASX 200 rose 0.3%. In Europe, major indexes edged lower, with the DAX down 0.2% and the FTSE 100 off 0.1%.

In the bond market, U.S. Treasuries fell for a third straight session, pushing the 10-year yield up 3.5 basis points to 4.139%, its highest close in two weeks.

Looking Ahead

Next week, investors will focus on consumer price inflation data, along with reports on new and existing home sales and durable goods orders. Speeches by Fed Chair Jerome Powell and other officials will also be closely watched for clues on the central bank’s policy path.

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