OAN Staff James Meyers
11:38 AM – Friday, August 23, 2024
Wall Street’s stock indexes increased substantially on Friday, with the S&P 500 index climbing towards a record high, after Federal Reserve Chair Jerome Powell said “the time has come” to reduce interest rates.
At an important annual economic conference in Jackson Hole, Powell endorsed imminent policy easing citing risks in the job market and inflation getting closer to the Fed’s 2% target.
In trading, the Dow Jones Industrial Average increased 460 points, or 1.1%, to 41,173. The S&P 500 increased 1%, with the Nasdaq climbing 1.3%.
As a result of the recent trading, the three major indexes were on track for their second straight week of gains.
The S&P 500 extended early gains and was just less than 1% away from overtaking a record high clinched in July, after plummeting as much as 9.7% from that level earlier in August.
Meta and Amazon jumped 1% each, boosting the index, while chip stocks such as Nvidia and Broadcom rose more than 3% each.
Additionally, all S&P 500 sectors advanced, led by a 1.4% increase in technology stocks, as the Philadelphia chip index rose 2.2%.
Meanwhile, the Fed is scheduled to meet on September 17th and 18th, with traders pricing in a 71.5% chance that the central bank will cut borrowing costs by 25 basis points, according to CME Group’s FedWatch tool.
“The market has been predicting the first rate cut to start going back to March of this year and investors have been disappointed multiple times,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
“The only question is by how much and, unlike the sprinters in the Olympics, the Fed will not explode out of the blocks with a 50-basis-point cut.”
Minutes from the Fed’s July meeting this week showed a number of lawmakers were ready to consider rate cuts in September.
That has helped Wall Street’s three main indexes recover from a significant downfall earlier this month after a poor July employment report was revealed.
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