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New York Post
Dow soars over 450 points as Wall Street cheers Fed rate cuts are on the way
By Reuters,
7 hours ago
Stocks rallied on Friday as dovish remarks from Federal Reserve Chair Jerome Powell solidified expectations that the central bank will cut its key policy rate in September.
The Dow Jones Industrial Average jumped 462.30 points, or 1.1%, to 41,175.08, just 23 points shy of its all-time closing record. The S&P 500 gained 1.2%, and the Nasdaq climbed 1.5%. All three indexes rose more than 1% for the week.
In highly anticipated remarks before the Jackson Hole Economic Symposium, Powell said “the time has come” to lower the Fed funds target rate, and “the upside risks of inflation have diminished.”
All three indexes had a winning week. AFP via Getty Images
“We do not see or welcome further weakening in labor market conditions,” Powell added in a speech that appeared to all but guarantee a rate cut at next month’s policy meeting, the first such cut in over four years.
“This is a dovish Powell today, and we see markets responding accordingly,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “What he’s suggesting here is if the labor market continues to weaken, we’re looking at a 50 basis-point rate cut in September as opposed to 25.”
All three major stock indexes extended their gains after the release of Powell’s prepared remarks, with megacaps Nvidia, Apple and Tesla providing the most muscle.
Fed Chair Powell endorsed imminent policy easing citing risks in the job market and inflation coming within reach of the Fed’s 2% target. AP
“We’re having a minor rally after yesterday’s pullback,” said Jay Hatfield, portfolio manager at InfraCap in New York. “We’re seeing the rally you’d expect in interest rate-sensitive stocks.”
The Fed is scheduled to meet on Sept. 17 and 18, with traders pricing in a 71.5% chance that the central bank will cut borrowing costs by 25 basis points. Getty Images
Next week, the data-dependent Fed will have a raft of economic indicators to consider ahead of its September rate decision, including the Commerce Department’s revised second-quarter GDP and its broad-ranging Personal Consumption Expenditures (PCE) report, which includes the Fed’s preferred inflation yardstick, the PCE price index.
Among the 11 major sectors in the S&P 500, all but consumer staples were in positive territory. Real estate share were boasting the largest percentage gain.
Workday beat quarterly revenue expectations and announced a $1 billion stock buyback plan, sending shares of the human resources software firm up 12%, the biggest percentage gainer on the Nasdaq.
Ross Stores gained nearly 2% after the discount retailer raised its fiscal 2024 profit forecast.
Turbo Tax’s parent Intuit sagged 6.8% in response to disappointing quarterly revenue.
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