Dow Jones Today: Stocks Poised to Open Higher Ahead of Key Speech by Fed Chair Powell

Major stock indexes extended their gains in early trading Friday as Federal Reserve Chair Jerome Powell indicated that the central bank is preparing to cut interest rates

The S&P 500 and Nasdaq Composite were up 0.6% and 0.8%, respectively, while the Dow Jones Industrial Average gained 0.6%. The major indexes fell on Thursday, led by a sharp decline for large-cap technology stocks, and are little changed for the week.

The market has bounced around this week after steadily gaining ground for nearly two weeks amid investor optimism about the continued strength of the economy and expectations that the Fed could start cutting its benchmark rate as soon as next month. Minutes from the Fed’s July policy meeting, released on Wednesday, showed that most policy committee members believed a rate cut in September would be appropriate if economic data comes in as expected.

During his remarks Friday at the Fed’s Jackson Hole Economic Policy Symposium, Powell said that “the time has come for policy to adjust” as inflation risks have subsided and the labor market has “cooled considerably.” The Fed, which hasn’t cut interest rates in more than four years, has kept the influential fed funds rate at a two-decade high to combat inflation, though recently Fed officials had noted concern about a weakening in the jobs market.

The yield on 10-year Treasurys, which had also bounced around this week ahead of the Powell remarks, dropped to 3.81% as Powell spoke, down from 3.86% on Thursday.

Among stock movers Friday, large-cap tech stocks were higher, led by a 4% gain for AI investor darling Nvidia (NVDA). Apple (AAPL), Microsoft (MSFT) Amazon (AMZN), Alphabet (GOOGL) and Meta Platforms (META) also moved solidly higher.  The iShares Semiconductor Index (SOXX) was up 3% after falling more than 3% the previous session.

Gold futures were up about 1% near $2,540, not far from record highs hit earlier in the week. Bitcoin moved to near $62,000, trading at its highest level in three weeks.