The blue chip index closed above the psychologically significant 42,000 level for the first time ever Thursday.

U.S. stocks rose after the Federal Reserve lowered its benchmark interest rates by 50 basis points to a range of 4.75% to 5%. That was the first rate cut in over four years that marked the beginning of a monetary-easing cycle in the world's largest economy.

The Federal Reserve is expected to cut its influential fed funds rate in its September meeting. But economists and market watchers are waiting to know by how much.

Some analysts had said the 50 basis point cut was already priced in by the market, but others said it would be positive for emerging markets such as India, bringing greater foreign inflows over time.