Index Surges as Expectations of a Rate Cut Climb

Major U.S. equities indexes surged to close out the week as Federal Reserve Chair Jerome Powell said the central bank could begin trimming interest rates as soon as next month.

The S&P 500 gained 1.5%, finishing just below its record close last week. The Dow soared 1.9% to set a new all-time closing high for the first time in 2025. The tech-heavy Nasdaq also added around 1.9%.

Following Powell’s comments, many of the top performances in the S&P 500 Friday came from shares of companies that could be poised to benefit as interest rates move lower. The likelihood of lower borrowing costs helped boost solar stocks, with shares of solar microinverter and battery storage specialist Enphase Energy (ENPH) soaring 10.4% to post the best performance of any stock in the benchmark index.

The Fed chair’s openness to near-term rate reductions also came as welcome news to companies with exposure to the housing market, which could see accelerated growth as mortgage rates retreat. Shares of Builders FirstSource (BLDR), a major supplier of residential construction materials, jumped 8.4%. Shares of flooring supplier Mohawk Industries (MHK) were up 7.3%.

A decline in borrowing costs can encourage consumers to increase their discretionary spending, which could have a positive impact on the travel industry. Shares of cruise operators Norwegian Cruise Line Holdings (NCLH) and Carnival (CCL) advanced around 7%, while airline stocks also moved higher.

The prospect of lower rates also stoked investors’ appetite for riskier assets, helping drive a rebound for the price of Bitcoin (BTCUSD) and other major cryptocurrencies that had slipped ahead of Powell’s speech as investors positioned themselves for a more hawkish tone. Shares of Coinbase Global (COIN), operator of the largest U.S. cryptocurrency exchange, added 6.5%.

Intuit (INTU) shares tumbled 5%, suffering the heaviest daily decline in the S&P 500, after the maker of tax and accounting software provided a weaker-than-expected outlook for the current quarter and the full year. The company pointed to soft demand for its MailChimp marketing platform and lower average revenue per user from TurboTax. The outlook overshadowed strong quarterly results, as Intuit beat quarterly sales and adjusted profit estimates, highlighting the contribution of its AI agents.

Major railroad operator and rail-to-truck transloader CSX (CSX) announced a coast-to-coast intermodal partnership with BNSF Railway, a subsidiary of Berkshire Hathaway (BRK.A, BRK.B). The move comes a few weeks after Union Pacific (UNP) and Norfolk Southern (NSC) agreed to a merger that would create the first transcontinental U.S. railroad, with CSX facing pressure from an activist investor to explore a potential deal of its own. CSX stock dropped 3.6% on Friday.

Shares of enterprise resource planning software provider Workday (WDAY) fell 2.8%. Although the company topped revenue estimates and edged out revenue expectations for its fiscal second quarter, its guidance for subscription revenue and operating margin in the current quarter came in below consensus forecasts. Workday’s CEO pointed to challenges facing the company’s government and education businesses as customers navigate funding cuts.