Finance
Stock market news: Dow jumps over 600 points after Fed chairman speaks
-
Federal Reserve Chair Jerome Powell said
Wednesday rates are “just below” a neutral
level. -
Wall Street rallied following his speech at the
Economic Club of New York, with the Dow gaining more than 600
points. -
Trade tensions were also in focus ahead of a meeting
between President Donald Trump and China’s Xi
Jinping. -
Follow the US indices in real
time here.
Stocks surged Wednesday after
Federal Reserve Chair Jerome Powell gave a speech received as
more dovish than expected, lifting Wall Street to its best day in
months following a series of bruising sell-offs in October and
November.
The Dow Jones Industrial Average
jumped 2.5%, or more than 600 points, marking its best day since
March. The Nasdaq Composite gained nearly 3%, and the S&P 500
was up 2.3%.
Powell said Wednesday that
corporate credit levels and quality
are
top risks to the
economy
, but the
outlook remains solid and rates are “just below” a neutral
level.
“These comments tilt the odds
just slightly in favor of fewer hikes in 2019,” said Adam Ozimek,
an economist at Moody’s. “This is good news given that the
economy is adding jobs quickly alongside a lack of accelerating
inflation.”
Market watchers will continue to
monitor for signs of whether recent turbulence in equity markets
or ongoing trade tensions could influence the Federal Reserve’s
rate path in meeting minutes out Thursday.
Treasury yields, which can point
to market expectations for interest rates, fell following
Powell’s speech. The 10-year shed 1.3 basis points to 3.046%, and
the 2-year was down 2.6 basis points to 2.805%.
Trade-sensitive stocks,
including
Boeing
(+4.8%)
and
Caterpillar
(+5%), led
the Dow higher. President Donald Trump and Chinese President Xi
Jinping are expected to meet at the G20 in Argentina on Saturday,
with tariff escalations between the world’s largest economies on
the line.
On Tuesday, New York Times
reported
that Trump is worried about the long-term
effects his trade policies could have on the market and the
economy. Still, the president told The Wall Street Journal this
week that he expects to increase tariff rates on Chinese imports
in January.
Oil plunged more than 3% after
the US
said
in a report that
stockpiles climbed for a 10th straight week. Prices plunged
deeper into bear territory, with
West Texas
Intermediate
trading
around $50.50 per barrel and
Brent
below $59. OPEC and other major producers are
expected to discuss coordinated output levels at a meeting next
week.
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