U.S. stocks closed sharply higher on Friday after Federal Reserve Chair Jerome Powell signaled the possibility of an upcoming interest rate cut, sending Wall Street to fresh highs.
The Dow Jones Industrial Average surged 846.24 points, or 1.89 percent, to a record 45,631.74. The S and P 500 climbed 96.74 points, or 1.52 percent, to 6,466.91, while the Nasdaq Composite jumped 396.22 points, or 1.88 percent, to 21,496.54.
Ten of the 11 major S and P 500 sectors finished in positive territory. Consumer discretionary stocks led the rally, advancing 3.18 percent, followed by energy, which rose 1.99 percent. Consumer staples was the lone decliner, slipping 0.35 percent.
Speaking at the Fed's annual Jackson Hole symposium, Powell said that "the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance," noting that the balance between the Fed's dual mandate of full employment and stable prices "appears to be shifting." He also pointed to "sweeping changes" in tax, trade and immigration policy as factors reshaping the economic landscape.
Following the remarks, expectations for a September quarter-point rate cut jumped to roughly 83 percent, up from about 75 percent earlier in the week, according to CME Group's FedWatch tool.
Technology stocks were among the biggest beneficiaries of Powell's dovish tone. Nvidia rose 1.72 percent, Meta increased 2.12 percent, and Alphabet and Amazon each advanced more than 3 percent. Tesla shares surged 6.22 percent, adding momentum to the day's gains.
U.S. stocks close higher after Fed chair signals potential rate cut
