The Dow Jones Industrial Average eked out a gain and closed at a record on Friday, capping a big rally for the week that came after the first major easing of interest rate policy by the Federal Reserve in four years.

The 30-stock Dow inched up 38.17 points, or 0.09%, for a new closing high of 42,063.36. The S&P 500 pulled back 0.19%, ending at 5,702.55, and the Nasdaq Composite dropped 0.36% to end at 17,948.32. On Thursday, the Dow hit a record above 42,000, and the S&P 500 climbed above 5,700 for the first time.

The three major averages notched weekly gains. The S&P 500 rose 1.36%, posting its fifth positive week over the past six weeks. The index is up more than 19% in 2024. The Dow ended the week higher by 1.62%, while the tech-heavy Nasdaq advanced 1.49%.

On Wednesday afternoon, the Federal Reserve slashed interest rates by a supersized half point, its first cut since 2020. In a delayed reaction, the market climbed higher Thursday as investors crowded into tech names such as Nvidia and shares set to benefit from lower rates such as Home Depot.

Fed Governor Christopher Waller, in the first comments by a member of the Fed since Chair Jerome Powell's press conference, said to CNBC on Friday that inflation is coming down faster than he expected, causing him to be in favor of the half-point cut.

"Investors viewed the aggressive rate cut as positive catalyst," said Nationwide chief of investment research Mark Hackett.

"The Fed was able to effectively convince investors that the sizable cut is a proactive measure to sustain economic momentum, rather than a reactive move to stabilize it. The strong market reaction indicates investors have confidence in the Fed and have a 'glass half full' mentality," Hackett added.

FedEx dented sentiment a bit on Friday after the shipping behemoth cut its earnings outlook. Shares dropped more than 15% and competitor UPS shed 2.7% in sympathy.