US equities ended the week mixed. Major indexes initially rose to record highs, supported by the Federal Reserve’s third consecutive rate cut, but late-week selling reversed some gains. Small-cap stocks outperformed, with the Russell 2000 rising 1.19%, reflecting their greater sensitivity to lower interest rates. The Dow Jones also advanced, while the S&P 500 slipped after a sharp Friday pullback. Technology stocks underperformed, with the Nasdaq Composite falling 1.62%, as renewed valuation concerns and uncertainty over returns on heavy AI infrastructure spending weighed on sentiment. Weak quarterly results and higher capital expenditure guidance from Oracle further pressured the sector.
The Fed cut its policy rate by 25 basis points to a 3.50%–3.75% range, though the decision revealed growing internal disagreement. Chair Jerome Powell acknowledged that rates are near neutral and that the Fed can afford to wait, while also highlighting downside risks to the labor market. The Fed also reiterated its readiness to purchase short-term Treasuries to ensure adequate market liquidity.
European equities finished the week slightly lower overall, even as performance diverged across major markets. Germany’s DAX rose 0.66% and Italy’s FTSE MIB added 0.19%, while France’s CAC 40 fell 0.57% and the UK’s FTSE 100 slipped 0.19%.
