The U.S. Stock Market Edges Higher After Quadrupling Records

U.S. equities pushed higher again on Friday, capping a powerful week-long advance that lifted all four major stock benchmarks to record territory at the same time a feat not seen since 2021. The broad rally came on the heels of the Federal Reserve’s decision to cut interest rates, igniting fresh momentum across Wall Street.

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By mid-morning in New York, both the S&P 500 and the Nasdaq 100 were up about 0.2%, adding to their all-time closing highs set a day earlier. The Dow Jones Industrial Average and the Russell 2000 also joined in, marking a historic sweep of records across large- and small-cap equities.

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For the Russell 2000 a gauge closely tied to smaller, riskier, and often more indebted companies the new peak was especially notable. It was the index’s first record in four years, ending its longest drought since the aftermath of the dot-com crash.

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BlackRock’s Alex Brazier told Bloomberg Television that the firm remains constructive on U.S. markets. “We’re pretty bullish on U.S. tech, U.S. earnings, and the near-term outlook for equities overall,” he said, while also stressing that the traditional link between stocks and bonds has become “unreliable,” prompting investors to diversify into more liquid alternatives.

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Nadia Lovell, head of global equity strategy at UBS’s wealth management arm, pointed out that small caps have delivered several false starts in recent years. “We’re finally seeing an all-time high after years of waiting,” she said. “But to keep momentum intact, earnings growth has to materialize and that still remains the key question.”

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The Fed’s move earlier this week to lower borrowing costs sparked a broad risk-on mood, with investors cheering not only the immediate relief but also the prospect of more easing to come. The central bank signaled that additional cuts could be on the table this year, further fueling optimism.

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Minneapolis Fed President Neel Kashkari reinforced that view in an essay published Friday, where he expressed support for the rate cut and penciled in two more reductions before year-end.

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While valuations remain a concern for some, Bank of America strategists see room for the rally to continue, especially in Big Tech. Chief investment strategist Michael Hartnett and his team analyzed 10 major equity bubbles over the last century and found that extreme overvaluations typically produced average gains of 244% from trough to peak.

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By comparison, the so-called Magnificent Seven stocks have climbed about 223% from their March 2023 lows a surge that, according to BofA, suggests the rally still has further to run.

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Still, not all strategists are convinced the path higher will be smooth. JPMorgan Asset Management cautioned that the biggest risk for mega-cap technology companies isn’t geopolitics but earnings disappointments tied to artificial intelligence. With sky-high expectations already baked into valuations, any stumble could trigger sharper pullbacks.

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Geopolitical factors remain in play as well. A phone call between U.S. President Donald Trump and Chinese President Xi Jinping was underway Friday, with TikTok’s future and broader trade relations on the agenda. Any progress could help ease tensions between the world’s two largest economies.

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Meanwhile, corporate America is already feeling the weight of policy shifts. FedEx said it expects a $1 billion hit this year from trade-related disruptions, pointing to tariffs and the end of a long-standing exemption for low-value imports as key drags on its business.

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This week’s synchronized rally across U.S. benchmarks marks a rare moment of unity for the market, fueled by central bank support and investor enthusiasm. Whether the gains can extend will depend heavily on corporate earnings, the durability of small-cap momentum, and whether Big Tech can keep delivering on lofty expectations in the age of AI.

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