Markets on Wall Street were positioned to open at record highs Thursday after the Federal Reserve issued a bigger-than-usual interest rate cut intended to fortify a cooling labor market and prevent a recession.

Wall Street is finally confident it knows what the Federal Reserve will do at its policy meeting next week, and a bigger-than-expected interest rate cut may not be a welcome surprise.

Wall Street's main indexes closed higher on Friday as investors honed in on the chance of a bigger interest rate cut by the Federal Reserve next week, with rate-sensitive small cap stocks outperforming.