The Dow Jones Industrial Average surged to an all-time high on Friday after Federal Reserve Chair Jerome Powell signaled that the central bank could begin easing monetary policy as soon as next month.
The Dow climbed 846 points, or nearly 1.9%, closing at a record 45,631. The S&P 500 rose 1.5% to finish at 6,466, just shy of its all-time high, while the Nasdaq Composite advanced almost 1.9% to end at 21,496.
The gains marked a sharp reversal from earlier in the week, when major averages were weighed down by weakness in megacap technology shares. Friday’s rally allowed the Dow to finish the week up 1.5%, while the S&P 500 managed a 0.3% gain. The Nasdaq, however, still ended the week slightly lower, down 0.6%.
Tech stocks fuel gains
Big-name technology companies were at the forefront of Friday’s rebound. Nvidia rose 1.7%, Meta Platforms jumped more than 2%, while Alphabet and Amazon each gained over 3%. Tesla led the group with a 6% surge.
Investors piled into growth names after Powell’s remarks at the Federal Reserve’s annual conference in Jackson Hole, Wyoming. In a relatively subdued speech, he said the “baseline outlook and the shifting balance of risks may warrant adjusting our policy stance,” hinting at growing concern about the US jobs market.
Rate cut expectations surge
The Fed chair’s tone marked a shift after months of resisting pressure from the White House to reduce borrowing costs. His comments prompted traders to boost expectations for a September cut. According to CME’s FedWatch tool, the odds of a quarter-point reduction jumped to about 83%, up from 75% earlier in the week.
US Treasury yields fell sharply following Powell’s speech, while the US dollar slid around 1%.
Australian market outlook
The momentum is expected to spill into local trade. Futures point to the S&P/ASX 200 opening 84 points higher on Monday, up 0.9% to a fresh record of 9,011. That follows last week’s breakthrough above the 9,000 level, driven by strong earnings season results.
A weaker US dollar also buoyed commodity prices, lifting prospects for Australian miners. Earnings reports from Regal, Santos, and Pilbara Minerals are due today.
