Wall Street Coasts Near Records as Dow Chases Historic Close

Wall Street is wrapping up the week in cruise control, with stocks hovering just shy of fresh highs as traders ride a wave of rate-cut optimism and solid earnings — even if a few bumps showed up along the way.

By mid-morning Friday, the S&P 500 was down a slim 0.1% after setting yet another all-time high on Thursday, still firmly on pace for its fourth winning week in the last five. The Dow Jones Industrial Average added 86 points (0.2%), flirting with its first record close since last December. The Nasdaq composite slipped 0.2%, weighed down by tech losses.

The market’s record run this week has been powered by growing confidence that the Federal Reserve will cut interest rates in September. Lower borrowing costs tend to juice stocks and the economy by making loans cheaper for homes, cars, and business investments — though they can also fan inflation.

Thursday’s hotter-than-expected wholesale inflation report did temper some of those hopes, but traders still overwhelmingly expect cuts. That’s helped pull Treasury yields lower, with the 10-year holding around 4.29% Friday.

Economic data Friday was a mixed bag:

• Retail sales rose 0.5% in July, right on target, showing consumers are still spending.

• New York manufacturing unexpectedly grew.

• Industrial production shrank when analysts were looking for growth.

• Consumer sentiment dropped for the first time in four months, as inflation worries crept back in.

On the stock leaderboard, UnitedHealth surged more than 11% after Warren Buffett’s Berkshire Hathaway disclosed a $1.6 billion stake. The pop was a big reason the Dow was within striking distance of a new record.

On the losing side, Applied Materials plunged nearly 12% despite beating quarterly estimates — its gloomy revenue forecast for the current quarter rattled investors. Chipmaker weakness spread to Nvidia, which slipped about 1%.

Overseas, Japan’s Nikkei 225 hit a record high on upbeat GDP data, while Hong Kong stocks dropped on signs China’s economy slowed sharply in July. European markets were mixed ahead of the Trump-Putin summit later Friday in Alaska, which could sway energy prices and geopolitical sentiment.

The Dow has been on a tear lately — up roughly 20% since its April low — but unlike the S&P 500 and Nasdaq, it hasn’t managed a record close this year. That could change today if it can hold a modest gain into the closing bell.

As Horizon Investments’ Scott Ladner put it:

“We’ve got solid earnings, a Fed ready to cut, and Trump doing micro-level disruptive things but not macro-level disruptive things. There aren’t a lot of massive headwinds right now.”

The real test will be whether August and September, historically tough months for stocks, can’t derail what’s shaping up to be one of Wall Street’s most impressive summer runs in years.

With input from USA Today, CNN, CNBC, and the Associated Press.