Wall Street closed higher because Powell indicated that Fed tariff cuts
The main index of Wall Street ended higher on Friday, with Blue-chip Dow hitting the highest record, when investors piled up in shares after the chairman of the Federal Reserve as Jerome Powell hinted the short-term interest rates during the Jackson Hole symposium speech.
His comments opened the way to cut potential tariffs at the Fed meeting on September 16-17, although Powell stressed the importance of job data and inflation was due before.
“Powell did what the central bankers did in Jackson Hole – he kept the door opening,” said Nigel Green, executive chief of Devere Group. “Cutting in September will convince the household and business that the central bank is not sleeping behind the wheel. Delaying only increases the possibility of a more difficult landing.”
Traders increase betting on the decline of the September interest rate after Powell’s comment, now placed nearly 90% of reduction opportunities, compared to around 75% before Powell’s statement.
According to the preliminary data, the S&P 500 gained 96.73 points, or 1.52%, ended at 6,466.55 points, while Nasdaq composites gained 396.22 points, or 1.88%, to 21,496.54. The average Dow Jones industry rose 841.14 points, or 1.88%, to 45,626.64.
Ten of 11 S&P 500 substors are traded higher, with the biggest discretionary consumer.
The Philadelphia SE semiconductor index jumped, while most of the megacap growth stock also jumped. Tesla leads profits.
The Russell 2000 index which is sensitive to the soaring rate, reaches the highest level so far this year.
With a profit on Friday, the S&P 500 yelled at a successive defeat five days after the extensive sales in heavy class technology stocks suppressed US equity this week.
The US shares have recovered sharply from April’s lowest position -when the market was rocked by the announcement of President Donald Trump. Recently, the index has returned to the highest record.
A series of resilient income, optimism around trade agreements and opportunities for slaughtering interest rates have become several main drivers of profits, although some concerns remain.
“Investors are comments that support Powell like this are the beginning of the cut parade. But one cut will not move the needle to consumer expenditure. A bigger question is whether this marks true pivot in Fed-or if the tariff increase will force it to direct the brakes before the shift even begins,” said Zak Stambor, a senior analysis for retail and ecommer.
Earlier on that day, UBS Global Wealth Management raised the year -end target for the S&P 500 for the second time in two months, betting on the company’s revenue strength, easeing trade tensions and expectations of interest rate cutting.
Among the other top drivers, Intel was obtained when the White House was expected to announce on Friday acquisition of 10% shares in the company. Coinbase also jumped when investors took shares related to crypto after Powell’s speech.
Intuit down after Turbotax-Maker estimates the growth of the first quarter revenue under the estimated analyst due to weak performance on the Mailchimp marketing platform.
Workday warehouse after the Human Resource Software Provider provides in-line prospects for the current quarter.
Source: Reuters
