Wall Street Flat as Investors Mull Fed's Rate Cut

Wall Street closed flat on Friday even as the Dow and S&P 500 hovered near record highs. Investors assessed the Federal Reserve's recent 50-basis-point rate cut, which initiated a cycle of rate reductions. Differing views among Fed governors on inflation highlighted ongoing economic debates.

Wall Street saw a flat close on Friday, with the Dow and S&P 500 staying close to their previous session record highs. The dollar firmed as investors absorbed the Federal Reserve's 50-basis-point cut announced midweek, marking the onset of a rate-reducing cycle.

Two Federal Reserve governors expressed opposing views about the inflation outlook, showing the extent of debate on the rate cut by Chair Jerome Powell. The week ended with all three major U.S. stock indexes higher, though they remained close to all-time peaks reached on Thursday.

Markets are fully pricing in a further rate cut of at least 25 bps in November, with a 48.9% probability given to a 50 bps cut, according to CME's FedWatch Tool. Michael Matousek of U.S. Global Investors indicated that the 50 bps cut has made investors mindful of underlying risks. Closing figures showed the Dow up 0.09% to 42,063.36, S&P 500 down 0.19% to 5,702.55, and Nasdaq Composite 0.36% lower at 17,948.32.

(With inputs from agencies.)