Wall Street’s major indexes surged by as much as 2% on Friday after U.S. Federal Reserve Chair Jerome Powell suggested the possibility of an upcoming interest rate cut during his address at the Jackson Hole Symposium.
Powell’s remarks signaled that a potential rate reduction could come at the Fed’s next policy meeting scheduled for September 16-17, though he emphasized that the decision would depend heavily on incoming reports on employment and inflation.
“Chair Powell was able to talk about the balance of risk shifting and therefore the potential… shifting of policy would be appropriate,” explained Art Hogan, chief market strategist at B Riley Wealth.
“Leaning into the fact that the labor market weakness is clearly the driver, as opposed to concern over the core goods price increases that we’ve seen because of tariffs… the clear message to the market is September is now very live.”
Following Powell’s speech, traders increased their bets on a September rate cut, assigning nearly a 90% chance of a reduction, up from roughly 75% before his comments.
By 11:46 a.m. EST, the Dow Jones Industrial Average had jumped 933.69 points, or 2.08%, reaching 45,719.19 — a new record high.
The S&P 500 advanced 106.45 points, or 1.67%, while the Nasdaq Composite climbed 424.12 points, a gain of 2.01%.
All 11 sectors within the S&P 500 traded in positive territory, with real estate — which is particularly sensitive to interest rates — up 1.8%, and consumer discretionary stocks rising nearly 2%.
A key semiconductor index surged 3.7%, while several major growth stocks posted strong gains. Tesla led the pack with a 5.2% jump.
If the market holds these gains, the S&P 500 is on pace to end a five-day losing streak triggered by a widespread selloff in large-cap tech names earlier in the week.
The Dow and S&P 500 are positioned to notch modest weekly advances, while the Nasdaq appears set for a slight weekly dip.
U.S. equities have staged a strong comeback since their April lows, when markets tumbled following President Donald Trump’s announcement of new trade tariffs. Recently, the indexes have been edging back toward record territory.
Strong corporate earnings, optimism surrounding trade negotiations between the U.S. and its partners, and the growing likelihood of rate cuts have all contributed to the recent rally.
Earlier Friday, UBS Global Wealth Management raised its year-end target for the S&P 500 for the second time in two months, citing robust earnings, easing trade tensions, and expectations of monetary policy easing.
Among notable individual movers, Intuit’s stock slid 6.2% after the TurboTax-maker projected first-quarter revenue growth below Wall Street’s forecasts due to weaker results from its Mailchimp marketing unit.
Workday fell 4.4% after the HR software company provided an outlook that aligned with analysts’ expectations but failed to impress investors.
On the NYSE, advancing stocks outnumbered decliners by a ratio of 12.14 to 1, while on the Nasdaq, gainers led losers by 6.3 to 1.
The S&P 500 recorded 21 new 52-week highs and no new lows, while the Nasdaq posted 101 new highs and 30 new lows.
{Matzav.com}
