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Investing.com — Stocks rose sharply on Friday, setting a new record high to close out a strong week, driven by the Federal Reserve’s first major interest rate cut in four years.

The 30-share Dow added 38.17 points, or 0.09 percent, to close at 42,063.36, marking a new all-time high. It fell 0.19% to 5,702.55, while it fell 0.36% to 17,948.32. On Thursday, the Dow topped 42,000 for the first time and the S&P 500 topped 5,700.

All three major indices ended the week in positive territory. The S&P 500 climbed 1.36%, posting gains in five of the past six weeks and rising more than 19% so far in 2024. The Dow rose 1.62% and the Nasdaq added 1.49%.

The market moves followed the Federal Reserve’s decision on Wednesday to cut interest rates by a substantial half percentage point, its first cut since 2020.

This week’s Fedspeak may provide more insight into last Wednesday’s unexpected decision.

On Thursday, Fed leaders are scheduled to speak at the 10th annual US Treasury market conference.

Fed Chairman Powell will deliver pre-recorded opening remarks, followed by speeches from New York Fed President Williams and Vice President for Supervision Barr.

“Comments from these officials will be looked at for clues as to where regulatory policy is moving, as well as any updates on how the Fed sees progress on reducing its balance sheet,” Deutsche Bank strategists said in a note .

On the economic front, key reports this week include Thursday’s final reading of Q2 real GDP, expected to match the preliminary figure of 3.0%, and Friday’s personal income (+0.3% forecast vs. +0.3% previously) and consumption (+0.3% vs. +0.5%) figures for August. Core PCE inflation data will also be released, with a forecast of +0.18% versus the previous +0.16%.

“Stronger-than-expected economic data would be a boon for stocks. Stocks in the S&P 493 should benefit from looser monetary policy and solid economic growth,” Yardeni Research wrote in a note on Monday.

“Bond holders may be less enthusiastic as long-term Treasury yields likely continue to rise in this no-recession scenario,” it added.

Focus this week on earnings: Micron and Costco

As September draws to a close, the final week brings a relatively light earnings schedule, although some highly anticipated reports are imminent.

Most notably, semiconductor giant Micron Technology (NASDAQ: ) and retail powerhouse Costco Wholesale (NASDAQ: ) are set to release their financial results.

Micron, one of Nvidia’s key suppliers of AI memory chips, will report earnings on Wednesday, with analysts predicting a 90% year-over-year revenue increase, fueled by growing demand for artificial intelligence memory chips.

While some Wall Street analysts remain bullish on the chipmaker, others recently cut their ratings on the stock and cut price targets, mainly due to high inventory levels and signs of a slowing memory market recovery .

Additionally, earnings updates from companies such as Accenture (NYSE: ), BlackBerry (NYSE: ) and AutoZone (NYSE: ) will also be on the lookout.

What analysts are saying about US stocks

Oppenheimer: “We continue to expect small- and mid-cap stocks to begin experiencing more sustained gains now that the Fed has begun to cut its benchmark rate. While we prefer equities over fixed income, we continue to view fixed income as complementary to equities and other asset classes in diversified portfolios when the duration is matched to investors’ goals, objectives and risk tolerance. Our price target for the S&P 500 this year remains 5,900.”

Bank of America: “We are now past what has been the Fed’s most uncertain day since at least 2015, with the best-case scenario of strong retail sales and a 50 basis point cut. Absent a big surprise in PCE, we don’t see any major macro data releases this week that could spook the market. Historically, quiet macro weeks have been the best weeks for stocks (average return +0.61% versus a typical +0.38%.”

BTIG: “As we discussed on Friday, the impending false breakout on the FOMC did not materialize. We are still in a weak seasonal window and can expect some digestion, but we need to respect a new high in the SPX, along with the equal weight S&P 500. price. While this does not rule out some short-term weakness, it usually bodes well for the medium term. High beta versus low vol has seen a nice rebound but has returned to a key resistance level. Removing that would be another optimistic change.”

Morgan Stanley: “The Fed delivered what we thought was the best near-term case for equities. Tactically, we’re moving to neutral in terms of defensive vs. cyclical as markets await more clarity on labor force data. We continue to recommend a high cap, quality bias.”