U.S. stocks jumped on Friday after Federal Reserve Chair Jerome Powell suggested a possibility of interest rate cuts ahead during his much-anticipated speech in Jackson Hole.
The Dow Jones Industrial Average climbed higher by 732 points, or 1.6%, touching a high of 45,512.25. The S&P 500 climbed 1.2%, while the Nasdaq Composite gained nearly 1.3%.
At the Fed’s annual conclave in Wyoming, Powell said in his tepid speech that while U.S. unemployment remains low, “with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.”
The central bank leader said in prepared remarks that “the balance of risks appear to be shifting” between the Fed’s dual mandate of full employment and stable prices. He cited “sweeping changes” in tax, trade and immigration policies.
Markets were last pricing in a roughly 91% chance of a quarter-point cut at the September meeting, according to the CME FedWatch tool.
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