Barclays and BNP Paribas expect the U.S. Federal Reserve to make a 25-basis-point interest rate cut in September, according to notes dated Friday, citing Chair Jerome Powell's shift in tone at Jackson Hole toward rising risks in the labor market.

The Dow Jones Industrial Average clinched a record high Friday for the first time this year hours after Federal Reserve Chair Jerome Powell hinted that the Fed may soon lower interest rates. The Dow climbed 846 points,