Euphoria on Wall Street: Powell's Rate-Cut Hints Ignite Market Rally
Wall Street saw a rally following Federal Reserve Chair Jerome Powell's comments suggesting a potential interest-rate cut. Investors now largely anticipate a cut in September. The optimistic response propelled major indexes like the Dow and Nasdaq to new highs, driven by gains across sectors, especially in consumer discretionary and semiconductors.
Wall Street's major indexes surged on Friday as Federal Reserve Chair Jerome Powell suggested the potential for an interest-rate cut in his anticipated Jackson Hole Symposium speech. Powell emphasized the importance of jobs and inflation data expected by the Fed's meeting on September 16-17.
Investors are optimistic, interpreting Powell's remarks as a dovish shift to support the weakening job market. This sentiment fueled a sharp rise, with a 90% probability now placed on a September rate cut. By early afternoon, the Dow Jones Industrial Average climbed to an all-time high, alongside significant gains in the S&P 500 and Nasdaq Composite.
The rate-sensitive Russell 2000 Index also soared, with consumer discretionary stocks leading the charge. Despite recent market turbulence, buoyant earnings, easing trade tensions, and expectations of rate cuts have driven a market rebound, although some concerns remain regarding tariffs and broader economic conditions.
(With inputs from agencies.)
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