The Wall Street stock indices soared on Friday, with the benchmark S&P 500 index near record highs, after Federal Reserve Chairman Jerome Powell said “the time has come” to cut interest rates.
At 1405 GMT, the Dow Jones Industrial Average was up 302.68 points, or 0.74 percent, at 41,015.46. The S&P 500 gained 56.13 points, or 1.01 percent, to 5,626.77 and the Nasdaq Composite added 255.03 points, or 1.45 percent, to 17,874.38.
In a highly anticipated speech at the Jackson Hole International Symposium, Powell backed the imminent easing of policy, citing risks in the labor market and inflation’s proximity to the Fed’s 2% target.
The S&P 500 extended early gains and was less than 1% away from surpassing the record hit in July, after falling as much as 9.7% from that level earlier in the month. Large growth companies such as Meta and Amazon rose 1% each, driving the index higher, while chip stocks such as Nvidia and Broadcom gained more than 3% each.
All three indexes are headed for their second straight week of gains, with the S&P 500 poised to rise more than 1%. All sectors of the S&P 500 advanced, led by a 1.4% rise in technology stocks, while the Philadelphia chip index added 2.2%.
The Fed is scheduled to meet on September 17-18, and Traders value at 71.5% the possibility that the central bank will cut borrowing costs by 25 basis pointsaccording to CME Group’s FedWatch tool.
“The market has been predicting the cut since March and investors have been disappointed on multiple occasions,” said Sam Stovall of CFRA Research in New York. “The only question is by how much, and unlike sprinters at the Olympics, the Fed isn’t going to rush out with a 50-basis-point cut.”
