US stocks end mixed but end week near record highs after first Fed rate cut in 4 years

• US stocks were mostly lower on Friday, although the Dow eked out a gain to close at a record high.

• The Federal Reserve’s first interest rate cut of 2020 helped boost the week’s gains.

• Investors see Fed easing as a positive sign for the economy and the stock market.

U.S. stocks closed mostly lower on Friday, but ended the week up just over 1 percent for the S&P 500, Nasdaq 100 and Dow Jones Industrial Average.

The Dow rose slightly in Friday’s session to close out another record close for the week.

Anticipation and delivery of the Federal Reserve’s first interest rate cut of 2020 helped boost gains this week.

The Fed issued a jumbo 50 basis point interest rate cut to “recalibrate” monetary policy, as Fed Chairman Jerome Powell put it nine times during his FOMC speech on Wednesday.

Investors took the move as reassurance that the US economy is on track for a soft landing as inflation continues to cool and the labor market normalizes.

US stocks rose on Thursday after falling slightly on Wednesday as investors had more time to digest the Fed’s interest rate decision.

There should be more gains for the stock market going forward, according to Raymond James CIO Larry Adam.

“The combination of Fed easing and a soft landing should prove to be a tailwind for risk assets (especially stocks). Historically, Fed easing cycles have been positive for the equity market. In fact, the S&P 500 is up ~5% on average in the 12 months since the first Fed tapering,” Adam said in a note on Friday.

The S&P 500 and Dow Jones Industrial Average both hit record highs on Thursday. But those record highs could become a liability if the economy weakens, according to Adam.

“With the S&P 500 hitting record highs and currently at some of the most expensive valuations (23.5 LTM P/E) we’ve seen in history, there isn’t much room for disappointment should the landing scenario soft would go down,” said Adam.

Here’s where US indices stood at the closing bell at 4pm on Friday:

Here’s what else happened today:

The story continues

In commodities, bonds and crypto:

• West Texas Intermediate crude fell 0.10 percent to $71.09 a barrel. Brent crude, the international benchmark, fell 0.39 percent to $74.59 a barrel.

• Gold rose 1.17% to $2,645.30 an ounce.

• The 10-year Treasury yield was 2 basis points higher at 3.733%.

• Bitcoin fell 0.11% to $62,894.

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