Markets close at record highs amid rumors of Fed interest rate cut
July 12 (UPI) — Major U.S. stock indexes closed at all-time highs Friday upon hints from Federal Reserve Chairman Jerome Powell that an interest rate cut could come soon.
The Dow Jones Industrial Average closed at 27,332.03, up 243.95 or 0.9 percent, an all-time high. The S&P 500 closed at 3,013.77, a 0.5 percent jump, to close above 3,000 for the first time. The Nasdaq Composite closed at 8,244.14, a 0.6 percent jump, also a record.
The gains were led by big boosts for J.B. Hunt Transport Services Inc. (5.9 percent), Corteva Inc. (4.43 percent), L. Brands Inc. (4.04 percent), Dow Inc. (4.04 percent) and Humana Inc. (3.95 percent).
The record highs could be a reaction from congressional testimony Powell gave earlier this week indicating the Fed could might make its first interest rate cut in more than a decade. The Fed board increased interest rates four times in 2018 but hasn’t touched them so far this year.
Many analysts saw Powell’s testimony Wednesday as a clear endorsement for a rate cut. Oxford Economics analyst Kathy Bostjanic said she expects a quarter-point cut at the July meeting, and another in September.
Powell told the House financial services committee Wednesday that uncertainty around trade policy, tariffs and the global outlook will factor into the Fed’s decision whether to cut rates when the next meetings begin July 30.
A Labor Department report released Thursday said that the United States exceeded expectations by adding 224,000 jobs during June, which analysts believe could make an interest rate cut this month less likely.