BREAKING: The Nasdaq closed at a record high today after testimony from the Fed Chairman indicated rate cuts are likely later this month. The Dow grew 0.29% and the Nasdaq rose 0.75%. The S&P broke 3,000 for the first time before closing at 2,993.
"I think it's safe to say Powell has his dove hat on and a quarter [rate] cut is coming," said Mike Loewengart, vice president of investment strategy at E-Trade. "What's interesting though is how quickly Powell pointed abroad to support the case for a weakening economy. Because the reality is things are still pretty strong here at home—last week's jobs numbers made that clear.
"Crosscurrents have reemerged," Powell said. "Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened. Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook."
Jerome Powell, chairman of the U.S. Federal Reserve, speaks during a House Financial Services Committee hearing in Washington, D.C., on Wednesday, July 10, 2019.The major stock index pared gains as Powell answered questions from lawmakers, however. While answering questions from lawmakers, Powell reiterated that current trade conditions and muted economic activity have dampened the U.S. economy's outlook. He noted, however, that the U.S. economy remains on solid ground.
The S&P 500 closed back below 3,000, up 0.5%. The Dow, meanwhile, climbed 76 points, or 0.3%, after rallying nearly 200 points. The Nasdaq closed 0.8% higher as Amazon rose 1.5% to break above $2,000 per share."Powell's prepared testimony struck a decidedly dovish cord with 'uncertainties' over trade and global growth since the June FOMC meeting characterized as having dimmed the outlook.
His testimony came after the Fed opened the door to cutting rates at its previous monetary policy meeting in June. The central bank dropped the word "patience" in its statement then.from the June policy meeting on Wednesday, which reiterated the case for easier monetary policy has strengthened.
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