Wall Street powered higher on Friday after Federal Reserve Chair Jerome Powell signalled that interest rate cuts could be approaching, though he stopped short of offering a clear timeline. The rally came as investors and President Donald Trump kept up pressure for lower borrowing costs, which they believe would provide a boost to the economy and financial markets.
The S&P 500 climbed 1.4%, wiping out its weekly losses after five sessions of modest declines that followed last week’s record high. The Dow Jones Industrial Average surged 716 points, or 1.6%, setting up to blow past its all-time peak last December. The Nasdaq composite also advanced 1.6% in morning trading in New York, AP reported.
Powell’s comments were delivered at the high-profile Jackson Hole symposium of central bankers in Wyoming. He acknowledged growing risks to the job market but offered no firm guidance on timing for a policy shift. “The stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance,” Powell said. He described current conditions as “a curious kind of balance” where fewer new workers are pursuing fewer new jobs.
The Fed chair added that inflation remained a risk, with Trump’s tariffs threatening to push consumer prices higher. Wall Street has been betting that a weak US jobs report earlier this month could accelerate cuts, perhaps as early as September’s policy meeting. Trump has been vocal in demanding lower rates, often targeting Powell with sharp criticism.
Bond markets rallied on Powell’s measured tone. The 10-year Treasury yield slid to 4.26% from 4.33% on Thursday, while the two-year Treasury yield, more closely tied to Fed expectations, dropped to 3.69% from 3.79% — a significant move in fixed income trading.
Corporate news also lifted investor sentiment. Ross Stores rose 0.8% after posting stronger-than-expected profits, with CEO Jim Conroy citing improved sales trends in July following a softer June. Chinese electric-vehicle maker Nio surged 12.4% after launching pre-sales for its premium SUV model, the ES8.
Nvidia, which has faced volatility amid concerns that AI stocks have overheated, gained 0.8% to reduce weekly losses. CEO Jensen Huang confirmed the company was discussing a new graphics processing unit (GPU) tailored for China with the Trump administration. The design would comply with national security restrictions that currently prevent Nvidia from selling its most advanced chips in the country.
Overseas markets largely mirrored Wall Street’s optimism. Germany’s DAX rose 0.4% even as official data showed its economy contracted 0.3% in the second quarter. In Asia, Shanghai’s benchmark jumped 1.4% and South Korea’s Kospi gained 0.9%.
The S&P 500 climbed 1.4%, wiping out its weekly losses after five sessions of modest declines that followed last week’s record high. The Dow Jones Industrial Average surged 716 points, or 1.6%, setting up to blow past its all-time peak last December. The Nasdaq composite also advanced 1.6% in morning trading in New York, AP reported.
Powell’s comments were delivered at the high-profile Jackson Hole symposium of central bankers in Wyoming. He acknowledged growing risks to the job market but offered no firm guidance on timing for a policy shift. “The stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance,” Powell said. He described current conditions as “a curious kind of balance” where fewer new workers are pursuing fewer new jobs.
The Fed chair added that inflation remained a risk, with Trump’s tariffs threatening to push consumer prices higher. Wall Street has been betting that a weak US jobs report earlier this month could accelerate cuts, perhaps as early as September’s policy meeting. Trump has been vocal in demanding lower rates, often targeting Powell with sharp criticism.
Bond markets rallied on Powell’s measured tone. The 10-year Treasury yield slid to 4.26% from 4.33% on Thursday, while the two-year Treasury yield, more closely tied to Fed expectations, dropped to 3.69% from 3.79% — a significant move in fixed income trading.
Corporate news also lifted investor sentiment. Ross Stores rose 0.8% after posting stronger-than-expected profits, with CEO Jim Conroy citing improved sales trends in July following a softer June. Chinese electric-vehicle maker Nio surged 12.4% after launching pre-sales for its premium SUV model, the ES8.
Nvidia, which has faced volatility amid concerns that AI stocks have overheated, gained 0.8% to reduce weekly losses. CEO Jensen Huang confirmed the company was discussing a new graphics processing unit (GPU) tailored for China with the Trump administration. The design would comply with national security restrictions that currently prevent Nvidia from selling its most advanced chips in the country.
Overseas markets largely mirrored Wall Street’s optimism. Germany’s DAX rose 0.4% even as official data showed its economy contracted 0.3% in the second quarter. In Asia, Shanghai’s benchmark jumped 1.4% and South Korea’s Kospi gained 0.9%.
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