Wall Street closed higher Friday, with all three major indexes — including the Dow Jones Industrial Average — finishing at record levels after Federal Reserve Chair Jerome Powell signaled the possibility of an interest rate cut in the near term during his remarks at the Jackson Hole Symposium.
Powell’s comments opened the door to a potential rate reduction at the Fed’s September 16–17 meeting, though he emphasized that the decision would depend on incoming data on employment and inflation. The suggestion comes after months of pressure from President Donald Trump to lower rates after he lowered them twice ahead of the 2024 election, when inflation was much higher.
“Powell did what central bankers do best at Jackson Hole — he kept the door open,” Nigel Green, chief executive of deVere Group, told Reuters. “A cut in September would reassure households and businesses that the central bank is not asleep at the wheel. Delaying only raises the odds of a harder landing.”
Traders increased their bets on a September rate cut following Powell’s remarks, with futures markets now pricing in nearly a 90 percent chance of a reduction, up from about 75 percent beforehand.
According to preliminary figures, the S&P 500 rose 96.73 points, or 1.52 percent, to close at 6,466.55. The Nasdaq Composite advanced 396.22 points, or 1.88 percent, to 21,496.54, while the Dow Jones Industrial Average climbed 841.14 points, or 1.88 percent, to 45,626.64 — its first record close of the year.
Ten of the S&P 500’s 11 sub-sectors finished higher, led by consumer discretionary stocks. Semiconductor shares surged, with the Philadelphia Semiconductor Index posting strong gains, while most megacap technology names also advanced. Tesla was among the day’s top performers.
The rate-sensitive Russell 2000 Index also rallied, reaching its highest level of the year. Friday’s gains helped the S&P 500 snap a five-day losing streak, which had been driven by a broad selloff in heavyweight technology stocks earlier in the week, Reuters added.
