US close: Stocks surge as Powell signals impending rate cut
Wall Street's three equity benchmarks surged well over 1% each on Friday after the head of the Federal Reserve cemented expectations for an interest-rate cut next month, saying "the time has come for policy to adjust".
Speaking at the Jackson Hole symposium in Wyoming, Fed chair Jerome Powell said policymakers are not looking for further cooling in labour-market conditions before move ahead with a rate cut.
"The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks," he said.
The comments lit a fire under stock markets with the Dow gaining 1.1%, the S&P 500 rising 1.2% and the Nasdaq jumping 1.5%.
Meanwhile, the yield on a 10-year US Treasury fell 6bp to the 3.80% mark, and the US Dollar Index slumped 0.8% to 100.68 – its lowest level since July 2023.
Ahead of the speech, economists had already widely predicted a 25 basis-point (bp) cut at the Fed's next policy meeting on 17-18 September, though Powell's dovishness "provides a fairly clear anchor for the job market and increases the chances of a more aggressive easing in monetary policy", according to Ryan Sweet, chief US economist at Oxford Economics.
"Powell’s assessment of the labor market was downbeat and suggests that the central bank believes the economy isn’t at full employment, keeping market expectations for a possible 50bps rate cut in September alive."
In other macro news, sales of newly-built homes in the US jumped last month. According to the Department of Commerce, in seasonally adjusted terms, sales of new single-family homes increased at a month-on-month pace of 10.6% in July to reach an annual rate of 739,000. Economists had forecast a reading of 630,000.
Market movers
Uber shares rose 1% after the announcement of a multiyear partnership with General Motors, which will see the latter's Cruise autonomous vehicles be available on the ride-sharing platform from next year. GM's stock jumped nearly 5%.
Accountancy software group Intuit dropped 7% as guidance for the current quarter disappointed the market, with investors shrugging off a better-than-expected fourth quarter.
Discount retailer Ross Stores edged 1% higher after beating earnings estimates in its second quarter, helped by higher customer traffic and customer spend.
Enterprise software firm Workday surged more than 12% after topping profit forecasts for its second quarter and lifting its margin guidance for the full year.
Dow Jones - Risers
Home Depot Inc. (HD) $375.59 2.80%
Walgreens Boots Alliance, Inc. (WBA) $10.30 2.69%
Goldman Sachs Group Inc. (GS) $509.64 2.34%
Intel Corp. (INTC) $20.54 2.19%
Salesforce.Com Inc. (CRM) $264.00 2.09%
Dow Chemical Co. (DOW) $53.58 1.85%
Travelers Company Inc. (TRV) $222.01 1.82%
Caterpillar Inc. (CAT) $348.27 1.77%
3M Co. (MMM) $130.60 1.52%
American Express Co. (AXP) $251.35 1.43%
Dow Jones - Fallers
Procter & Gamble Co. (PG) $169.12 -0.58%
Visa Inc. (V) $267.44 -0.19%
S&P 500 - Risers
Nektar Therapeutics (NKTR) $1.35 12.03%
Norwegian Cruise Line Holdings Ltd (NCLH) $17.50 7.76%
Carnival Corp. (CCL) $16.64 7.51%
Mohawk Inds Inc. (MHK) $157.59 5.25%
Macy's Inc. (M) $15.96 5.21%
Harley-Davidson Inc. (HOG) $38.10 5.13%
DENTSPLY Sirona Inc. (XRAY) $25.31 4.85%
Truist Financial Corp. (TFC) $43.84 4.71%
Comerica Inc. (CMA) $57.54 4.68%
Zions Bancorporation (ZION) $49.90 4.66%
S&P 500 - Fallers
Intuit Inc. (INTU) $619.85 -6.83%
Advance Auto Parts (AAP) $49.17 -3.82%
Synopsys Inc. (SNPS) $539.39 -1.58%
McKesson Corp. (MCK) $552.32 -1.56%
AutoZone Inc. (AZO) $3,121.59 -1.43%
Gallagher Arthur J (AJG) $287.67 -1.37%
Micron Technology Inc. (MU) $102.85 -1.35%
Willis Towers Watson Public Limited Company (WTW) $281.46 -1.29%
CME Group Inc. (CME) $207.05 -1.23%
Cencora Inc (COR) $237.54 -1.18%
Nasdaq 100 - Risers
Workday, Inc. (WDAY) $259.95 12.49%
Qurate Retail Inc. (QRTEA) $0.66 11.81%
DENTSPLY Sirona Inc. (XRAY) $25.31 4.85%
Tesla Inc (TSLA) $220.32 4.59%
Nvidia Corp. (NVDA) $129.37 4.55%
Skyworks Solutions Inc. (SWKS) $109.21 3.83%
Expedia Group Inc. (EXPE) $138.13 3.76%
Texas Instruments Inc (TXN) $209.88 3.00%
Analog Devices Inc. (ADI) $228.39 2.92%
Walgreens Boots Alliance, Inc. (WBA) $10.30 2.69%
Nasdaq 100 - Fallers
Intuit Inc. (INTU) $619.85 -6.83%
Synopsys Inc. (SNPS) $539.39 -1.58%
Micron Technology Inc. (MU) $102.85 -1.35%
O'Reilly Automotive Inc. (ORLY) $1,116.15 -1.02%
Trip.com Group Limited (TCOM) $42.18 -0.99%
Dollar Tree Inc (DLTR) $97.00 -0.98%
Intuitive Surgical Inc. (ISRG) $486.55 -0.79%
Meta Platforms Inc. (META) $528.00 -0.74%
Idexx Laboratories Inc. (IDXX) $488.13 -0.73%
Verisk Analytics Inc. (VRSK) $268.15 -0.66%