In a mixed day of trading on Friday, US stocks showed little change as investors deliberated over the possibility of rate cuts. The Dow Jones Industrial Average (DJI) held steady just below the pivotal 40,000 level, which it had touched for the first time during Thursday's session. Similarly, the S&P 500 (GSPC) and the Nasdaq Composite (IXIC) hovered just below the flatline, although all three indexes were on track to end the week with gains.

Earlier in the week, the stock market rally received a setback following comments from Federal Reserve officials cautioning that interest rates are likely to remain at historic highs for the foreseeable future. This tempered expectations of a rate cut in September, which had been bolstered by positive inflation data.

With a relatively light economic and corporate calendar on Friday, the Dow faced limited opportunities to make another push towards crossing the 40,000 milestone. However, the S&P 500 and Nasdaq were within reach of setting new record highs.

Investors closely watched appearances by the Federal Reserve's Mary Daly and Christopher Waller for any divergence from their colleagues' stance that the central bank will base its decisions on data and wait for clear signs of cooling inflation before making any moves.

In individual stock news, Reddit shares (RDDT) surged by 13% after a partnership was announced with OpenAI. This collaboration will integrate content from Reddit's forums into OpenAI's ChatGPT, an artificial intelligence technology. The deal is seen as a significant win for Reddit, as it seeks to monetize its unique archive of posts and provide real-time content on recent topics.

On the other hand, GameStop (GME) experienced a sharp decline of over 25% after the company disclosed plans to sell 45 million new shares of common stock. Alongside this announcement, GameStop released preliminary financial results indicating a substantial decrease in sales compared to the same period last year. The retailer expects its fiscal first-quarter sales to range between $872 million and $892 million, down from $1.24 billion in the previous year.

Additionally, it was revealed that Federal Reserve Chair Jerome Powell had tested positive for COVID-19. Powell is currently experiencing symptoms and will be self-isolating at home. As a result, he will deliver his remarks at Georgetown University's Law School graduation via a pre-recorded video.

As the trading day progressed, the major indexes made minimal movements. The Dow Jones Industrial Average continued to hover close to 40,000, albeit without any decisive breakthrough. The S&P 500 and Nasdaq Composite registered marginal gains of 0.1%, remaining on track for a positive end to the week.

In pre-market trading, Reddit stock (RDDT) surged by 14% following the announcement of its partnership with OpenAI. With this deal, Reddit aims to enhance its platform by integrating OpenAI's technology and utilizing its AI-powered features. OpenAI, in turn, will become an advertising partner on Reddit, boosting the social media company's revenue stream.

Overall, Wall Street remained cautious amid uncertainties surrounding interest rates and the ongoing impact of the pandemic. Investors will continue to closely monitor economic data and the statements of Federal Reserve officials to gauge the market's direction in the coming weeks.