S&P 500 hits 3,000 points for first time ever - CNN

Powell, who is beginning his biannual congressional testimony on Wednesday, pointed at economic crosscurrents, including "uncertainties around trade tensions and concerns about the strength of the global economy [that] continue to weigh on the US economic outlook." He also noted inflation continued to run below the Fed's target.

Investors read that as a sure sign that the Fed plans on cutting its interest rates at its next meeting later this month.

Stock futures had been in the red Wednesday morning but turned higher after the remarks were published ahead of the opening bell.

The S&P 500 (SPX) bounced 0.7% higher. The Nasdaq (COMP)was up 1%. The Dow (INDU) was up 0.7%, or 188 points, marking its first higher open in four days. The Dow logged its third consecutive close in the red on Tuesday.

Both the S&P 500 and the Nasdaq hit intra-day record highs just a few minutes into the trading day.

Market expectations of a near-term interest rate cut had dominated for weeks until last Friday's jobs report. The better-than-expected data suggested that the economy might not need the boost that a rate cut would provide.

On Tuesday, Philadelphia Fed President Patrick Harker said he didn't see any need for interest rate changes. He said he would consider a rate cut if the economy weakened substantially, according to The Wall Street Journal.

But Powell's remarks on Wednesday seemed to send a clear signal to the market. Expectations for a rate cut, measured by the CME's FedWatch tool, returned to 100%, with 84% expected a 25 basis point cut. It had slipped to 96% earlier Wednesday, after sitting at 100% for week.

Lower interest rate make it cheaper for companies to borrow money and are thus supportive for the stock market.

Powell's testimony will be followed by the minutes of the Fed's June meeting, which will be released at 2 pm ET. On Thursday Powell will appear before the Senate Banking Committee.

Yields on US government debt, which is in part driven by interest rate expectations, dropped initially on Powell's remarks but bounced back. The 10-year US Treasury yield is little changed at 2.0647%.

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https://www.cnn.com/2019/07/10/investing/dow-stock-market-today-powell/index.html

2019-07-10 14:14:00Z
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