A trader works at the New York Stock Exchange, which moved above 27,000 Thursday. (Associated Press)
The Dow Jones industrial stock index was in record territory above 27,000 points Thursday, as Fed chair Jerome Powell reiterated the central bank is prepared to cut interest rates to support the economy.
In testimony before the Senate banking committee on Thursday, Powell pointed to the U.S.-China trade war and signs of a global slowdown as reasons the Fed might have to cut rates at the end of July.
The Dow had risen 190 points to 27,050 at midday, a record high, mainly on the strength of tech stocks. The broader S&P also flirted with record territory above 3,000, and at midday was up six points to 2999.
The tech-heavy Nasdaq was up 11 points at 8214. Stock indexes around the world rose Wednesday on Powell’s remarks to the House of Representatives, hinting at lower rates, and he repeated the message Thursday.
Stocks were briefly knocked lower by a tweet from U.S. President Donald Trump, accusing China of “letting us down” by not promptly buying more U.S. farm products.
“They have not been buying the agricultural products from our great Farmers that they said they would,” Trump said on Twitter. “Hopefully, they will start soon.”
The U.S. consumer price index, released by the Labour Department on Thursday, increased 1.6 per cent in June from a year earlier.
Cheaper gas prices were offset by higher rents and auto costs, but the key core inflation rate was an annualized 2.1 per cent, close to the Fed target.
Federal Reserve policymakers have cited low inflation readings as a justification for potentially lowering short-term interest rates, but the relatively strong core inflation number may mean slower rate cuts than the market is anticipating, analysts say.