Stocks reach higher on Fed Powell’s rates cut remarks. On Wednesday, stocks closed record highs after Federal Reserve Chair Jerome Powell signaled rate cuts in the U.S.
The S&P 500 hit above 3,000 for the first time. The Nasdaq Composite and Dow Jones Industrial Average also closed all-time highs.
“I think it’s safe to say Powell has his dove hat on and a quarter rate cut is coming,” Mike Loewengart, E-Trade’s vice president of investment strategy said.
Powell said that due to continuous uncertainties over the economic outlook, business investments across the U.S. have slowed.
Powell said, “Crosscurrents have reemerged,” adding, “Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened. Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook.”
The S&P 500 reached below 3,000, up 0.5% at 2,993.07. The Dow rose 0.3% or 76.71 points at 26,860.20. The Nasdaq also closed highs at 8,202.53 after Amazon climbed 1.5% to reach above $2,000 per share.
Gold futures rallied more than 1%.
Powell’s testimony came after the Fed opened the door to rate cuts to an interest rate cuts in June. The central bank dropped a statement to be “patient.”
In addition, stronger-than-expected growth in jobs has strengthened expectations for a more aggressive rate cut easing.
Besides, Tesla shares climbed more than 3% after the company announced that it is preparing for an increase in production.