Stock Market Today: Dow Achieves Record Close with Minimal Gain

The Dow Jones Industrial Average managed to achieve a slight gain, closing at new record highs on Friday as investors contemplated a significant drop in FedEx’s performance and anticipated further rate cuts from the Federal Reserve following a substantial reduction earlier in the week.

By 4 p.m. ET, the Dow rose by 38 points, or 0.1%, reaching a record closing value of 42,063.36. In contrast, the S&P 500 fell by 0.2%, and the NASDAQ Composite declined by 0.4%.

The stock market received a boost later in the week after the Federal Reserve reduced interest rates by 50 basis points. Analysts from UBS noted that historically, stocks tend to perform well during periods of Fed rate cuts while the U.S. economy continues to grow. Markets seem to be optimistic about this scenario materializing.

This optimism marks a significant shift from earlier concerns in August when disappointing job data raised fears that the Fed had delayed its rate cuts for too long.

### Fed Officials Speak After Rate Cut

In the aftermath of the Federal Reserve’s impactful rate reduction, comments from officials, including Philadelphia Fed President Patrick Harker and Governor Michelle Bowman, garnered attention.

Governor Bowman expressed her dissent regarding the Fed’s decision to initiate the rate-cutting cycle with such a substantial cut, as she aimed to prevent the impression that the Fed has fully addressed inflation. Bowman was the only voting member opposed to the 50 basis point cut decided upon in September, advocating instead for a more conservative reduction of 25 basis points.

### Corporate Updates

FedEx saw a 15% drop in its stock due to significantly weaker-than-expected quarterly earnings. The company faced challenges as customers shifted to cheaper, slower delivery options, alongside a softer-than-anticipated industrial demand. FedEx is often viewed as an indicator of the global economy due to its extensive involvement in trade, and its disappointing earnings raise concerns about a potential slowdown in economic activities.

In contrast, Nike’s stock surged nearly 7% following the announcement that CEO John Donahoe would resign next month. Elliott Hill, who has spent over thirty years in various leadership roles within Nike, is set to take over. According to Deutsche Bank, this leadership transition is expected to inspire a renewed focus on product innovation, marketing strategies, and rebuilding critical wholesale partnerships that have suffered under previous management, ultimately enhancing profitability and shareholder returns.

Meanwhile, American Airlines is reportedly in negotiations with Citigroup to establish an exclusive credit card partnership, moving away from its current partnership with Barclays.

Additionally, Intel Corporation experienced a more than 4% increase in its stock value after reports emerged that Qualcomm has approached the company regarding a potential takeover.

(Peter Nurse and Ambar Warrick contributed to this report.)