Stocks rocketed to their biggest gain in eight months Wednesday after Federal Reserve Chairman Jerome Powell hinted that the Fed might not raise interest rates…
Stocks rocketed to their biggest gain in eight months Wednesday after Federal Reserve Chairman Jerome Powell hinted that the Fed might not raise interest rates much further. The Dow Jones industrial average surged 617 points.
In a speech to the Economic Club of New York, Powell said that rates are close to neutral, the level at which they neither hold back growth nor aid it. That might mean the Fed isn’t planning to raise interest rates far above their current levels. Powell also appeared to suggest that the Fed might pause its cycle of interest rate increases next year so the central bank can assess the effects of its actions.
That came as a relief to investors, who feel the 9-year-old bull market could come to an end if rates rise too fast. Those worries have contributed to the market’s big slump in October and November.
Stocks rose in morning trading and nearly tripled their gains as Powell spoke. Bond yields slipped and the dollar weakened as investors adjusted their expectations for how quickly interest rates might rise in the future.
San Francisco cloud software company Salesforce surged 10.3 percent to $140.64 after its earnings and revenue, released Tuesday, were stronger than analysts expected. That helped pull technology companies higher. Software maker Adobe rose 7.3 percent to $249.21.Apple jumped 3.8 percent to $180.94 and Microsoft rose 3.7 percent to $111.12.
The S&P 500 index surged 61.61 points, or 2.3 percent, to 2,743.78, its biggest gain since March 26. The S&P 500 has gained 4.2 percent this week, but would still need to rise another 6.8 percent to return to its record high from late September.
The Dow Jones industrial average jumped 617.
