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The S&P 500 has never been higher

Stocks rose to a record high yesterday, a day after the Federal Reserve opened the door to interest rate cuts in the coming months, Matt Phillips of the NYT reports.

The S&P 500 closed at 2,954.18, about eight points higher than its previous high-water mark, which it reached on April 30. The index is now up more than 7 percent for the month and 18 percent for the year.

Why? The likelihood of rate cuts. “After the Fed’s monetary policy announcement on Wednesday, investors are putting the probability of a rate cut at the Fed’s next meeting in July at 100 percent,” Mr. Phillips writes.

The rebound is “a repeat of a situation in January, when the central bank backed away from its plans to keep raising interest rates.” That was seen as preventing a recession, and led some investors to think that the Fed would act in a way that benefits the markets.