Dow Jones surges 462 points as stocks rebound after Powell signals upcoming rate cuts

• U.S. stocks jumped as Fed Chairman Jerome Powell signaled imminent interest rate cuts.

• Powell confirmed the accommodative pivot in his speech at the Jackson Hole Economic Symposium.

• “The direction is clear, and the timing and pace of rate cuts will depend on the data coming in,” Powell said.

U.S. stocks rebounded on Friday, with the Dow Jones Industrial Average gaining more than 450 points after Federal Reserve Chairman Jerome Powell’s statement. confirmed that interest rate cuts are imminent.

Powell hinted at the central bank’s next accommodative turn in his speech at the Jackson Hole Economic Symposium on Friday, saying that “the time has come for policy to adjust.”

Bond yields fell during the day after the remarks. The yield on the 10-year Treasury note fell six basis points to 3.801%, while the yield on the two-year note, which is highly sensitive to Fed policy, fell nine basis points to 3.915%.

“The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, evolving outlooks, and the balance of risks,” Powell said.

The Fed has broadly said the risks to its dual mandate of controlling inflation and seeking full employment were balanced in recent months, but on Friday Powell changed his tone and said downside risks were increasing.

“Overall, the economy continues to grow at a solid pace. But inflation and labor market data show that the picture is changing. Upside risks to inflation have diminished and downside risks to employment have increased,” Powell said. “We do not want or welcome a further slowdown in labor market conditions.”

This should pave the way for an interest rate cut at the Fed’s FOMC meeting in September.

“The Powell pivot is here as the Fed has now firmly turned dovish,” Ryan Detrick, a strategist at the Carson Group, said in an email to Business Insider on Friday, adding that the Fed is likely to make several interest rate cuts in the coming months.

With interest rate cuts looming, Investors are now wondering how far the Fed will cut rates.

The CME FedWatch tool suggests the Fed will initiate its first interest rate cut at its September FOMC meeting and will ultimately cut rates by nearly 100 basis points by the end of the year.

Here’s where the U.S. indices stood at 4 p.m. Friday close:

Here’s what else happened today:

The story continues

In commodities, bonds and cryptocurrencies:

• West Texas Intermediate Crude oil rose 2.62% to $74.92 a barrel. Brent crude oilthe international benchmark, jumped 2.38% to $79.06 per barrel.

• Gold rose 1.16% to $2,545.80 an ounce.

• The 10-year Treasury yield fell six basis points to 3.801%.

• Bitcoin increased 5.43% to $63,663.

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