The S&P 500 Index ($SPX) (SPY) on Friday closed up by +1.52%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up by +1.89%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up by +1.54%. September E-mini S&P futures (ESU25) rose +1.52%, and September E-mini Nasdaq futures (NQU25) rose +1.55%.

Stock indexes settled sharply higher on Friday, with the Dow Jones Industrials posting a new all-time high. Stock prices jumped and bond yields tumbled after comments from Fed Chair Powell opened the door for a Fed rate cut next month. Fed Chair Powell said downside risks to employment are rising, and the shifting balance of risks may warrant adjusting monetary policy. The 10-year T-note yield fell to a 1-week low of 4.24% on the comments, and the chances of a Fed rate cut at the September 29-30 FOMC meeting rose to 81% from 71% before Powell spoke.

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Fed Chair Powell said, "The stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance. Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance."

Comments from Boston Fed President Susan Collins on Friday were slightly hawkish, as she noted that US economic growth is slowing, but overall economic fundamentals are solid, with upside risks to inflation and downside risks to labor. She added that Fed policy is modestly restrictive, which is appropriate.

On the geopolitical front, US Vice President Vance said negotiations over ending Russia's war in Ukraine are focused on security guarantees for Ukraine and territory Russia wants to control, including Ukrainian territory that it currently isn't occupying, as the US tries to broker a peace deal between the two countries. The US is working to set up a meeting between Presidents Putin and Zelensky, and if that meeting goes well, President Trump said he'll look to follow up with a trilateral summit with the leaders.