S&P 500 enjoys best day since May as traders eagerly embrace Fed chief’s nod toward lower rates
The benchmark US stock index and Nasdaq 100 rose 1.5% while the Russell 2000 soared 3.9%.
The S&P 500 enjoyed its best day since May on the heels of Fed Chair Jay Powell’s speech at the Jackson Hole Economic Symposium, which fortified traders’ expectations that the central bank will resume its rate-cutting campaign next month.
While Powell did not out-and-out commit to a cut in September, he acknowledged that the balance of risks was shifting in a way that “may warrant” less restrictive monetary policy.
The benchmark US stock index and Nasdaq 100 rose 1.5% while the Russell 2000 soared 3.9%.
Every S&P 500 sector ETF ended positive outside of staples, which was flat. Consumer discretionary led the way up with a 3% jump, its biggest one-day gain since the US-China trade truce on May 12.
Airline stocks were big beneficiaries of the risk-on tone, with American, Delta, United, Southwest, JetBlue, and Alaska all outperforming.
Alphabet had a strong session, benefiting from reports that Apple is mulling using its Gemini AI model to power the next generation of Siri and its Waymo unit receiving a permit to test self-driving cars in New York City.
Nvidia gained, but far underperformed the average semiconductor stock, following a report that it’s told two suppliers to halt H20 production as Chinese regulators push domestic tech companies to forgo purchasing the processor, citing data security concerns.
Intel rose 5.6% after President Donald Trump said the US government would take a roughly 10% position in the embattled chipmaker linked to funding received as part of the CHIPS Act.
Nio’s hot run amid the launch of a new SUV continued, with the Chinese EV maker popping double digits on elevated volumes. Elsewhere in EV land, Lucid sank after announcing a 1-for-10 reverse stock split, a bid to stave off delisting.
Zoom lived up to its name, rising double digits after posting better-than-expected earnings and hiking its full-year guidance.
Over in meme stocks, Opendoor rose nearly 40% as traders enthusiastically embraced the potential for lower interest rates to bolster its business prospects.
