The Dow Jones Industrial Average eked out a gain and closed at a record on Friday, capping a big rally for the week that came after the first major easing of interest rate policy by the Federal Reserve in four years.

The 30-stock Dow inched up 38.17 points, or 0.09%, for a new closing high of 42,063.36. The S&P 500 pulled back 0.19%, ending at 5,702.55, and the Nasdaq Composite dropped 0.36% to end at 17,948.32. On Thursday, the Dow hit a record above 42,000, and the S&P 500 climbed above 5,700 for the first time.

The three major averages notched weekly gains. The S&P 500 rose 1.36%, posting its fifth positive week over the past six weeks. The index is up more than 19% in 2024. The Dow ended the week higher by 1.62%, while the tech-heavy Nasdaq advanced 1.49%.

On Wednesday afternoon, the Federal Reserve slashed interest rates by a supersized half point, its first cut since 2020. In a delayed reaction, the market climbed higher Thursday as investors crowded into tech names such as Nvidia and shares set to benefit from lower rates such as Home Depot.

Fed Governor Christopher Waller, in the first comments by a member of the Fed since Chair Jerome Powell's press conference, said to CNBC on Friday that inflation is coming down faster than he expected, causing him to be in favor of the half-point cut.

"Investors viewed the aggressive rate cut as positive catalyst," said Nationwide chief of investment research Mark Hackett.

"The Fed was able to effectively convince investors that the sizable cut is a proactive measure to sustain economic momentum, rather than a reactive move to stabilize it. The strong market reaction indicates investors have confidence in the Fed and have a 'glass half full' mentality," Hackett added.

FedEx dented sentiment a bit on Friday after the shipping behemoth cut its earnings outlook. Shares dropped more than 15% and competitor UPS shed 2.7% in sympathy.

Major averages register weekly gains

U.S. stocks finished Friday's trading session mixed but notched week-to-date gains.

The Dow Jones Industrial Average inched up 38.17 points, or 0.09%, on Friday. The 30-stock index rose 1.62% over the week.

The S&P 500 pulled back 0.19% during Friday's session. Week to date, the broad market index added 1.36%.

The Nasdaq Composite shed 0.36% Friday, but ended the week 1.49% higher.

— Hakyung Kim

Intel stock jumps after report of takeover talks

Shares of Intel jumped in late afternoon trading and were last up 6% after The Wall Street Journal reported that Qualcomm had approached its fellow chip company about a takeover deal.

The report, citing people familiar with the matter, said the move was made "in recent days."

Shares of Qualcomm were last down more than 3%.

— Jesse Pound

S&P 500 earnings expected to grow 4.6% in Q3, expanding for a fifth straight quarter, FactSet says

Earnings at S&P 500 companies are forecast by analysts to grow 4.6% in the three months ending Sept. 30, expanding for a fifth straight quarter, FactSet says.

At the end of the second quarter, analysts had forecast third-quarter earnings growth of 7.8%, according to senior earnings analyst John Butters.

So far, 60 S&P 500 companies have issued negative earnings per share guidance and 50 S&P 500 companies have announced positive earnings per share guidance for the third quarter.

The forward 12-month price-to-earnings ratio for the S&P 500 now stands at 21.4, based on estimated corporate profits for the coming 12 months, FactSet said. That is above the five-year average of 19.5 and the 10-year average of 18.0.

— Scott Schnipper

FedEx heads for worst session since 2022 after earnings miss

FedEx shares were poised for their worst day in about two years after earnings came in lower than Wall Street expected.

Shares of the transportation stock tumbled more than 13% in Friday's session. If that holds through session close, it would mark the stock's worst day since September 2022, when it plunged more than 21%.

Friday's slide came after FedEx reported first-quarter earnings of $3.60 per share, excluding items, on $21.58 billion in revenue. Analysts polled by LSEG forecast $4.76 in earnings per share and $21.93 billion in revenue.

Shares are now up just more than 2% for 2024, notably underperforming the broader market.

— Alex Harring

Front end of Treasury curve should be higher, Lazard chief market strategist says

A key part of the bond market is not fully buying into the Federal Reserve's messaging this week, according to Lazard chief market strategist Ronald Temple.

"The market reaction that surprised me is the short end of the curve not responding to the messaging at the Fed meeting and not responding to the dot plot," Temple told CNBC on Friday.

While the Federal Reserve's dot plot suggested that the central bankers see another 0.5 percentage point cut by the end of this year, the Fed funds futures are pricing in at least 0.75 percentage points, according to the CME FedWatch Tool.

The 2-year U.S. Treasury yield was at 3.57% on Friday, close to the median Fed funds rate projection of 3.4% for the end of 2025 from the central bank's latest projections.

"That basically means to me that 2-year Treasury yields are in the wrong place. They should be higher," Lazard said.

— Jesse Pound

Vistra on pace for 10-day winning streak

Vistra soared more than 14% in afternoon trading, putting it on track for its 10th straight day of gains. This marks the longest-winning streak for the stock since Feb. 29, when it was up for 12 consecutive days.

If the stock closes around this level Friday, it would notch its best day since July 31, when it gained 14.81%. Shares of the power company have jumped more than 44% over the 10-day period and more than 24% week to date.

Shares have also had a monster run this year, surging more than 176%.

— Sean Conlon

Future consolidation may be more muted than expected, BTIG says

A market pullback could still be coming, but it may not be as big as previously anticipated, according to BTIG.

"Do we think some consolidation is still warranted? Yes," chief market technician Jonathan Krinsky told clients Friday. "Is the weakness likely to be more moderate than we initially thought? Yes."

Krinsky's comments come after the S&P 500 rallied to all-time highs on Thursday. He said he would be a "patient buyer" and respect the breakout "until proven otherwise."

— Alex Harring

Bowman explains no vote on rate cut, worries the move was 'premature'

Federal Reserve Governor Michelle Bowman said Friday she would have preferred this week's rate cut to be half the size the Federal Open Market Committee approved, fearing that the bigger move could reignite inflation.

"Although it is important to recognize that there has been meaningful progress on lowering inflation, while core inflation remains around or above 2.5 percent, I see the risk that the Committee's larger policy action could be interpreted as a premature declaration of victory on our price stability mandate," Bowman said in a statement released at 1 p.m.

Bowman was the first Fed governor to cast a "no" vote on the FOMC's meeting statement since 2005. She said she respected the committee's decision and agreed that policy needs to change from the previous restrictive stance.

The committee voted to cut its benchmark rate by 50 basis points to a target range of 4.75% to 5.00%. A basis point equals 0.01%.

— Jeff Cox

Constellation Energy leads Nasdaq to winning week

Some unlikely stocks are powering the Nasdaq-100 toward a 1.4% gain for the week.

Constellation Energy is the biggest winner in the index, with shares up 26% since the start of the week. CrowdStrike and Airbnb have also won big, with shares rallying about 14% and 11%, respectively. PayPal, Meta Platforms and Baker Hughes have surged at least 7% each.

Arm Holdings is the biggest loser in the index, with shares headed for a nearly 6% weekly loss. Moderna and Electronic Arts are down more than 4% each.

— Samantha Subin

FedEx, Nike among the names making the biggest midday moves

Here are some stocks making the biggest moves midday:

• FedEx — The delivery giant plunged more than 13% after reporting a steep quarterly earnings drop. The company also lowered its full-year revenue forecast. CEO Raj Subramaniam said industrial demand was softer than expected, while FedEx's customers continued to shift to cheaper, slower delivery options, which squeezed profits.
• Nike — The apparel stock jumped 5.8% after the announcement of a CEO change. Nike veteran Elliott Hill is taking over for John Donahoe in October. Shares of the company were down about 25% for the year prior to the announcement.
• Constellation Energy — Shares surged more than 17% after the company announced plans to restart the Three Mile Island nuclear plant and sell that power to Microsoft to satisfy the energy needs of its data centers. With that, Microsoft will purchase electricity from the plant in a 20-year agreement.

Read here for the full list.

— Sean Conlon

Novo Nordisk shares tumble as obesity pill data disappoints

Pharmaceutical companies are scrambling to improve upon the existing obesity treatments. Right now, these blockbuster drugs are delivered via an injection. The holy grail would be an effective pill that would be easier for patients to take and for companies to manufacture.

On Friday, Novo Nordisk suffered a setback in its quest and shares tumbled nearly 6% in trading after data from a phase 2a trial of monlunabant came in below expectations. Patients lost about 5.8% of their body weight after 16 weeks of treatment. Investors had been hoping for at least a 15% reduction.

The experimental once-daily pill was added to Novo's portfolio with the acquisition of Inversago Pharmaceuticals last year. Unlike Novo's Wegovy, it is not based on incretin hormones such as GLP-1. Instead, it is a cannabinoid, or CB1 receptor blocker.

Corbus Pharmaceuticals shares plunged nearly 60% on the news. It is developing a CB1 treatment for weight loss as well.

Morgan Stanley analyst James Shin said the "underwhelming" results remove a threat of a "well-capitalized" competitor to orforglipron, the pill rival Eli Lilly is developing. Eli Lilly shares rose 1.5%.

— Christina Cheddar Berk

The Fed's rate-cutting history could indicate an upcoming recession for the U.S. economy, says Piper Sandler

History may indicate tough times ahead for the U.S. economy, according to Piper Sandler.

In a recent report, Piper Sandler chief global economist Nancy Lazar noted that this current easing cycle is reminiscent of two others. Namely, in both 2001 and 2007, the Federal Reserve delivered a 50 basis point rate cut following a preceding tightening cycle.

"They'd waited too long to start snugging, so inflation had already accelerated. The Fed compensated with aggressive tightening, triggering a recession 10 months after liftoff. The pivot to easing couldn't stop that process," she wrote.

Lazar continued: "On average, it takes 10 quarters after rate liftoff for a downturn to commence. This is the 10th quarter. And given the size of the rate hikes, and the Fed's balance sheet drawdown, joblessness could reach 6%."

— Lisa Kailai Han

Centessa Pharmaceuticals jumps 5% on Morgan Stanley upgrade

Centessa Pharmaceuticals could be at the forefront of a leading narcolepsy treatment that can send its shares soaring, according to Morgan Stanley.

Analyst Jeffrey Hung upgraded the clinical-stage pharmaceutical company to overweight from equal weight and also lifted his 12-month price target by $15 to $26, which suggests a whopping 64% potential upside. Shares are up nearly 108% this year and rose more than 5% Friday on the upgrade.

Centessa is developing a pipeline of orexin receptor 2 agonists, which attempt to activate parts of the body involved with regulating sleep and wakefulness in the body. One of the company's drugs is ORX750 for the treatment of sleep-wake disorders, including narcolepsy type 1 and 2, or NT1 and NT2. 

"Recent topline ORX750 Phase 1 results in healthy volunteers remove the largest overhang on the orexin 2 field and confirm it has potential to be best-in-class for treating narcolepsy," Hung said. 

For more on the stock and Morgan Stanley's investment thesis, read here.

— Pia Singh

Stifel sees correction for S&P 500 by year-end

The record-high levels for the stock market seem unstable given the economy and valuations, and the S&P 500 is likely to slide before the end of the year, according to Stifel strategist Barry Bannister.

"Our instruments tell us to expect an S&P 500 correction to the very low 5,000s by 4Q24," Bannister said in a note to clients. If the index hit 5,000, it would be a decline of about 12% from where it was trading midday Friday.

Bannister pointed to slowing job growth as a sign that the market still has recession risk and said valuations for growth stocks seem too high.

"Today's near three-generation high S&P 500 P/E and Growth vs. Value relative out-performance sounds rosy, but trend peaks for those two variables (as now) have always presaged a recession and bear market…at least for the past 90 years," the note said.

— Jesse Pound

Energy, materials underperform Friday

Energy and materials fell around 0.9% Friday, underperforming the broader market.

All sectors in the S&P 500 were in the red for the day with the exception of utilities, which advanced 1.9%. Constellation Energy's 14.2% jump led the sector higher.

— Hakyung Kim

Yen weakens after Bank of Japan meeting

The yen fell against the dollar after Bank of Japan Governor Kazuo Ueda said the bank would not rush to raise interest rates. The dollar rose 1% to 143.98 yen.

Traders had widely expected the governor to signal more of a willingness to raise rates by the end of the year.

— Hakyung Kim

Stocks slip Friday morning

U.S. stocks began Friday's session slightly lower.

The Dow Jones Industrial Average slipped 111 points, or 0.3%. The S&P 500 fell 0.2%, while the Nasdaq Composite was flat.

— Hakyung Kim

Warren Buffett's Berkshire sells more BofA shares, pushes stake down to 10.8%

Warren Buffett's Berkshire Hathaway resumed selling down its big Bank of America stake, according to a regulatory filing.

The conglomerate dumped about 22.27 million shares of the bank for roughly $896 million in separate sales from Tuesday through Thursday. Berkshire now owns 836 million shares, or a 10.8% stake in the lender.

Since mid-July, Berkshire has offloaded about $8 billion of Bank of America stock.

Buffett famously bought $5 billion worth of BofA's preferred stock and warrants in 2011 in the aftermath of the financial crisis. He converted those warrants in 2017, making Berkshire the largest shareholder in BofA. The "Oracle of Omaha" then added 300 million more shares to his bet around 2018 and 2019.

BofA CEO Brian Moynihan recently said he has no knowledge of Buffett's motivation for selling.

"I don't know what exactly he's doing, because frankly, we can't ask him. We wouldn't ask," he said during the Barclays Global Financial Services Conference last week. "But on the other hand, the market's absorbing the stock … we're buying a portion of the stock, and so life will go on."

— Yun Li

Stocks making the biggest moves before the bell: FedEx, Chewy and more

These are the stocks moving the most in premarket trading:

• FedEx — Shares of the shipping giant shed more than 13% after posting a significant decline in profits and cutting its full-year guidance.
• Chewy — The pet products retailer lost nearly 3% after announcing a public offering of $500 million of its Class A stock.
• Trump Media & Technology Group — Shares traded nearly 5% lower as selling restrictions on former President Donald Trump and other early investors ended.

Read the full list of stocks moving here.

— Lisa Kailai Han

FedEx drops after earnings miss

FedEx shares were down 13% after the delivery giant reported weaker-than-expected fiscal first-quarter figures. That decline would be its biggest since Sept. 16, 2022, when it plunged 21.4%.

The company earned $3.60 per share, excluding certain items, on revenue of $21.58 billion. Analysts expected a profit of $4.76 per share on revenue of $21.93 billion.

— Fred Imbert

European markets open lower

European markets opened lower Friday as investors digested a slew of central bank rate decisions this week and their effect on the global economy.

The pan-European Stoxx 600 index was down 0.35% in early deals, as most sectors and major bourses traded in the red. Tech stocks lost 0.89%, while household goods were 0.73% lower.

The regional benchmark closed higher Thursday, after the U.K.'s Bank of England and Norway's Norges Bank both held rates steady, drawing a contrast with the U.S. Federal Reserve's bumper rate cut a day prior.

— Karen Gilchrist

It has been a big week for small caps

The Russell 2000 surged 2.1% on Thursday, posting a seventh straight positive session.

It also marks the first seven-day win streak for the small-cap benchmark since March 2021.

The index is also on pace for a 3.2% gain on the week.

The Russell 2000's hot streak comes as the Federal Reserve dialed back interest rates by a half point. Lower rates are generally a boon for small companies, which tend to take on floating rate debt and could thus see their financing costs come down.

— Darla Mercado, Chris Hayes

Energy is the big winning sector in the S&P 500 this week

The S&P 500 is on pace for a nearly 1.6% jump this week, and a reawakening in the energy sector is contributing to the gains.

As of Thursday, seven of the 11 sectors of the S&P 500 are positive on the week, with energy up more than 4%. Standouts in the sector include Baker Hughes, up 8.9% for the week, and SLB, which is on pace for a nearly 7% advance.

The turn higher for energy names comes as West Texas Intermediate futures wipe their 2024 losses, supported by rising tensions in the Middle East and the Federal Reserve's rate cut. U.S. crude oil is up less than 1% in 2024, but it is still down more than 11% for the quarter.

— Darla Mercado, Chris Hayes

Stocks making the biggest moves after hours

Check out some of the companies making headlines in extended trading:

• Nike — Shares soared 10%. The sneaker company announced that CEO John Donahoe would step down from the role on Oct. 13. Nike veteran Elliott Hill, who had been at the company for 32 years before retiring in 2020, will take the helm.
• FedEx — Shares of the shipping company pulled back 10%. FedEx trimmed the higher end of its full-year earnings outlook and cut its revenue guidance. Fiscal first-quarter results missed the mark as well. FedEx reported adjusted earnings per share of $3.60 on revenue of $21.58 billion, while analysts polled by LSEG were looking for $4.76 per share in earnings and $21.93 billion of revenue.
• MillerKnoll — The office furniture company slipped more than 2% after missing analysts' estimates on the top and bottom lines in the fiscal first quarter. MillerKnoll reported adjusted earnings per share of 36 cents on revenue of $861.5 million. Analysts polled by FactSet forecast 40 cents per share on revenue of $889.4 million. The company also issued weak guidance for the current quarter.

Read the full list here.

— Brian Evans

Stock futures open little changed

Stock futures opened little changed on Thursday, following fresh record highs for the Dow Jones Industrial Average and the S&P 500.

Futures tied to the 30-stock Dow gained 14 points, or 0.03%. S&P 500 futures ticked down 0.05%, while Nasdaq 100 futures slipped 0.12%.

— Brian Evans