U.S. equities soared on Friday after Federal Reserve Chair Jerome Powell hinted at the possibility of an interest rate cut in September during his closely watched speech at the Jackson Hole Economic Symposium.
Market Performance
- Dow Jones Industrial Average (DJI): +800 points (+1.9%) → fresh record high
- S&P 500 (GSPC): +1.5%
- Nasdaq Composite (IXIC): +1.9%
The rally followed a volatile week dominated by concerns over technology stocks and doubts about artificial intelligence–related trades.
Powell’s Remarks: Rate Cut Bets Rise
Powell acknowledged that inflation risks remain “tilted to the upside”, with tariff-related price pressures “now clearly visible.” Still, he noted that the Fed’s baseline outlook may warrant adjusting policy as growth moderates.
Traders quickly revised expectations:
- 91.5% odds of a September rate cut (up from 70% earlier in the day).
- Compared to 85% odds one week ago, the probability of easing has sharply risen.
Bond yields fell following Powell’s comments, with the 10-year (TNX) and 30-year (TYX) Treasury yields retreating.
Ripple Effects: Crypto & Commodities
Powell’s remarks also lifted sentiment in alternative assets:
- Bitcoin (BTC-USD) moved higher.
- Ethereum (ETH-USD) led gains among major cryptocurrencies.
Political Pressure and Fed Independence
The White House closely monitored Powell’s speech as President Trump continued to pressure the central bank for faster rate cuts. Trump escalated his criticism by demanding the resignation of Fed Governor Lisa Cook, accusing her of misconduct — and even threatening to “fire” her, though legal precedent makes such action difficult.
Corporate Movers
- Intel (INTC): +5% after Trump confirmed the U.S. government would acquire a 10% stake, calling it a “great deal.”
- Zoom (ZM): Shares jumped on strong quarterly results, boosted by AI-driven growth.
- Ross Stores (ROST): Gained as shoppers sought discounts amid tariff pressures.
- Intuit (INTU) & Workday (WDAY): Declined on weaker outlooks.
Outlook
Markets are now positioned around the expectation that the Fed will cut rates in September, potentially marking a turning point for both equities and risk assets. Investors remain focused on whether inflation pressures cool enough to justify easing without reigniting price instability.
⚠️ Disclaimer: Market movements and policy forecasts are based on current conditions and may change with new data.