US equity indexes closed higher this week as a 50 basis-point cut in interest rates by the Federal Reserve ignited a broad rally, reflecting growing confidence in a soft economic landing, given the central bank's focus on the labor market.
* The Dow Jones Industrial Average ended at 42,063.36 on Friday, compared with 41,393.78 a week ago, after reaching intraday records twice this week. The Nasdaq Composite closed at 17,948.32 versus 17,683.98 a week earlier. The S&P 500 ended at 5,702.55, compared with 5,626.02 a week earlier.
* Energy, communication services and financials led sectors this week, outperforming technology.
* The S&P 500 hit its 39th all-time high this year after the Federal Open Market Committee took a more aggressive approach in its policy pivot on Wednesday. The FOMC anticipates a reduction of the same magnitude by year-end and a further 100 basis points next year.
* These Fed projections are predicated on continued economic growth, a slog through the "last mile" toward 2% inflation and limited damage to the labor market via higher unemployment, Jefferies US economist Thomas Simons said in a note.
* "A larger first move signals the Fed's commitment to not falling behind the curve and their confidence in disinflation," Morgan Stanley said in a note.
* The FOMC statement acknowledged further progress on inflation while flagging risks ahead for the labor market, Morgan Stanley said. The Summary of Economic Projections shifted to four cuts this year instead of one.
* If momentum slows more than expected, the Fed will cut more aggressively, Jefferies' Simons said. "Depending on the severity of the slowdown, it is possible that cuts would bring rates down to the low 2% range or possibly the high 1% range."
* The US 10-year Treasury yield traded at around 3.72% late Friday, above a close at 3.65% a week earlier.
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