U.S. stocks rallied to extend a winning streak to three days and trim a recent selloff, courtesy of Fed Chairman Jerome Powell’s speech that appeared to ease festering concerns about a potential monetary policy overshoot. The U.S. dollar fell and Treasury yields were mixed, with Powell’s comments appearing to overshadow a full docket of divergent economic data and lingering trade concerns ahead of this weekend’s highly-anticipated meeting between China and the U.S. at the G20 summit. Crude oil prices saw some pressure and gold gained ground.
The Dow Jones Industrial Average (DJIA) jumped 618 points (2.5%) to 25,366, the S&P 500 Index rallied 62 points (2.3%) to 2,744, and the NASDAQ Composite surged 209 points (3.0%) to 7,292. In heavy volume, 929 million shares were traded on the NYSE and 2.4 billion shares changed hands on the NASDAQ. WTI crude oil dropped $1.27 to $50.29 per barrel and wholesale gasoline was off $0.02 at $1.38 per gallon. Elsewhere, the Bloomberg gold spot price was up $5.85 to $1,220.90 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—fell 0.5% to 96.83.
Technology was a standout sector today, though members of FAANG and technology stocks have contributed to recent market volatility, and investors are combing through macro risks that could impinge tech’s growth.
Fed Chairman Jerome Powell’s speech appeared to provide the spark for the stock markets, as well as pressure on short-term Treasury yields and the U.S. dollar. Powell stated that the current interest rate is “just below” neutral and acknowledged a risk of “moving too fast” on monetary policy normalization. Powell’s comments also emphasized a “data dependent” monetary policy approach and that there is “no preset policy path.” The Fed Chief offered an upbeat view of the economy, noting that it is now close to its objectives of maximum employment and price stability, while adding that overall financial stability vulnerabilities are at a moderate level. Tomorrow, the Fed will remain in focus as the Central Bank will release the minutes from its monetary policy meeting earlier this month, where it expectedly kept its stance unchanged and made only trivial changes to its policy statement to keep a December hike expectations intact.
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