Dow rises more than 300 points as stocks rally after Powell signals Fed rate cuts ahead

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Stocks rose Friday after Federal Reserve Chair Jerome Powell indicated interest rate cuts were on the horizon.

The Dow Jones Industrial Average
climbed 350 points, or 0.9%. The S&P 500
gained 1%. The Nasdaq Composite
advanced 1.4% as technology stocks outperformed.

Stocks took a leg up after Powell signaled decreases to interest rates ahead during his speech in Jackson Hole, Wyoming. But Powell did not provide specific information on when, or by how big any cuts to the borrowing cost would be.

“The time has come for policy to adjust,” Powell said during the Fed’s annual retreat. “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.”

That pleased traders, who are unanimous in betting on a rate cut at the September meeting, according to the CME Group’s FedWatch. But there’s less consensus over how big that decrease will be.

Technology stocks rallied with particular strength as investors grew hopeful that a lower-rate environment would benefit this group. Tesla
jumped more than 4%, while Nvidia
and Advanced Micro Devices
popped more than 3% and 2%, respectively.

Small-cap stocks also gained on this outlook, with the Russell 2000
advancing more than 2%.

“Powell’s comments have brought a lot of excitement for traders, even though many expected the Fed to say that the time has come to make adjustments,” said Naeem Aslam, chief investment officer at Zaye Capital Markets. “It shows how deprived the market has been due to high interest rates.”

The three major averages are heading for a winning week despite some pressure on Thursday from rising Treasury yields. The S&P 500 and Nasdaq are now each up about 1.2% and 1.3%, respectively, on the week, while the Dow has added 0.9%.

8 Min Ago
Nasdaq outperforms, led by software and semiconductor stocks
The Nasdaq Composite
popped around 1% during Friday’s session as Federal Reserve Chair Jerome Powell signaled to rate cuts on the horizon.

Workday
was the biggest gainer in the concentrated Nasdaq-100
, surging more than 10%. Semiconductor stocks also rallied, with Marvell Technology
, Arm Holdings
, GlobalFoundries
and Nvidia
last up more than 4% each.

Tesla
added more than 4%, along with Warner Bros. Discovery
.

— Samantha Subin

26 Min Ago
Small caps outperform
Small cap stocks rallied with outsized strength on Friday after Federal Reserve Chair Jerome Powell’s speech bolstered hopes for a lower-rate backdrop.

The Russell 2000
jumped more than 2.5% as of shortly after 10:30 a.m. ET. For comparison, the broad S&P 500
rose just over 1%.

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WATCHLIST
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Quote Details

Russell 2000 vs. S&P 500, 1-day
— Alex Harring

40 Min Ago
Zinc on pace for best week since April as China cuts production
Zinc prices are up more than 4% this week, the industrial metal’s best performance since April as smelters in China cut back on production.

Zinc was trading at $2,884.65 per metric ton Friday morning, up $27 or 0.96%.

Zinc is used in the galvanizing process to protect iron and steel from rusting. It is also used in the electric grid, helping to protect solar panels and wind turbines.

Producers in China are cutting back due to low ore availability and weak profits. China is responsible for about half of refined zinc production worldwide.

— Spencer Kimball

55 Min Ago
Powell: ‘The time has come for policy to adjust’
A television station broadcasts US Federal Reserve Chair Chair Jerome Powell speaking in Jackson Hole, Wyoming, on the floor of the New York Stock Exchange (NYSE) in New York on August 23, 2024. Powell said on August 23 that the "time has come" for the US to start cutting interest rates, adding that his "confidence has grown" that the battle against inflation is on track. "The time has come for policy to adjust," he said in a keynote speech at the Jackson Hole Economic Symposium in Wyoming, according to pre
A television station broadcasts US Federal Reserve Chair Chair Jerome Powell speaking in Jackson Hole, Wyoming, on the floor of the New York Stock Exchange (NYSE) in New York on August 23, 2024.
Angela Weiss | AFP | Getty Images
Federal Reserve Chair Jerome Powell indicated on Friday that interest rate cuts could be coming.

Notably, the Fed chief did not provide exact details on potential timing or size for the decreases.

“The time has come for policy to adjust,” Powell said in his keynote address at the Fed’s annual retreat in Jackson Hole, Wyoming. “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.”

— Alex Harring, Jeff Cox

1 Hour Ago
Stocks open higher
The three major indexes kicked off Friday higher as traders readied for Federal Reserve Chair Jerome Powell’s remarks in Jackson Hole.

The Dow
climbed more than 170 points, or 0.4%, as of shortly after 9:30 a.m. ET. The S&P 500
and Nasdaq Composite
rose 0.5% and 0.8%, respectively.

— Alex Harring

2 Hours Ago
Fed’s Bostic stops short of endorsing September rate cut
speaking at Jackson Hole on August 23, 2024.
speaking at Jackson Hole on August 23, 2024.
David A. Grogan | CNBC
Atlanta Federal Reserve President Raphael Bostic said Friday that an interest rate cut is “in play” for September but did not make a firm commitment.

Noting that inflation improving but is still “not particularly close to our target,” Bostic told CNBC’s Steve Liesman that he is still waiting for more confirmation from the data that it’s time for the Fed to start easing monetary policy.

“We still have a ways to go, and I don’t think it’s in our interest, or in anyone’s interest, to just assume that we’re done and so we don’t have to worry about it,” he said during the “Squawk Box” interview.

Bostic has said previously that he doesn’t expect the Fed to cut until the fourth quarter, and only once this year, counter to market expectations.

—Jeff Cox

3 Hours Ago
Stocks making the biggest moves premarket
A cat sits next to a Chewy shipping box arranged outside a house in Germantown, New York, US, Monday, Feb. 19, 2024. Chewy Inc. is scheduled to release earnings figures on March 20. Photographer: Angus Mordant/Bloomberg via Getty Images
A cat sits next to a Chewy shipping box outside a house in Germantown, New York, on Feb. 19, 2024.
Angus Mordant | Bloomberg | Getty Images
Check out the companies making headlines before the bell:

Chewy — The pet retailer stock advanced more than 2% on an upgrade from Piper Sandler to outperform from neutral. Piper Sandler believes gross margin expansion and efficiency gains are upside catalysts for the stock.

Peloton — Shares of the connected fitness company slid about 2.4%, a day after Peloton popped roughly 35% on strong quarterly results that reflected a return to sales growth for the first time in nine quarters as it slashed its costs. Peloton gave a mixed outlook for the year ahead. JPMorgan also downgraded the stock after Thursday’s rally.

Warby Parker — The glasses retailer jumped 6% after JMP Securities upgraded shares to outperform from market perform. The firm forecasts more constructive commentary from Warby Parker’s management in the quarters ahead.

The full list can be found here.

— Hakyung Kim

3 Hours Ago
How stocks are performing this week
Just Friday is left in what’s shaping up to be a choppy week. Here’s where the three indexes stand week to date:

The Dow
is up 0.1%.
The S&P 500
is up 0.3%.
The Nasdaq Composite
is down 0.1%.
— Alex Harring

5 Hours Ago
Market rebound drivers are still in place, Vital Knowledge says
Despite Thursday’s seesaw market action, Adam Crisafulli reiterated that the “big 3” drivers of the August snapback remain in place. These are:

“Reassuring growth”
Solid earnings
Expectation of the Federal Reserve easing monetary policy
“Although in the immediate term bulls need to contend with: 1) expectations (it’s possible Powell tempers hopes on the pace and magnitude of the approaching easing cycle while there’s still a big chunk of the Jul-end earnings season left to go, including the two most important companies: Nvidia and Broadcom) and 2) valuations (the SPX’s PE is quite elevated, which leaves little room to absorb macro setbacks).”

— Fred Imbert

8 Hours Ago
European markets open higher
European stocks opened higher Friday as investors look ahead to U.S. Federal Reserve Chair Jerome Powell’s speech later in the session from Jackson Hole, Wyoming.

The Stoxx 600 index was up 0.11% in early deals, with all major bourses and the majority of sectors trading in the green. Oil and gas stocks rose 0.57%, while food and beverage stocks slipped 0.87%.

The U.K.’s FTSE index was 0.29% higher at 8,312, Germany’s DAX was up 0.25% at 18,538, France’s CAC 40 was up 0.28% at 7,545 and Italy’s FTSE MIB was 0.44% higher at 33,452.