Business Traders work at the New York Stock Exchange. (AP Photo/Mark Lennihan) 11 Jul 2019 04:39AM(Updated: 11 Jul 2019 04:40AM) Share this content
NEW YORK: The Nasdaq rose to a record on Wednesday (Jul 10) as US stocks rallied following dovish commentary from Federal Reserve Chairman Jerome Powell that opened the door to an interest rate cut.
All three major indices surged to all-time intraday records after Powell’s written congressional testimony was released but the tech-rich Nasdaq Composite Index was the only one to hold the record, ending at 8,202.53, up 60.80 points (0.75 per cent).
The Dow Jones Industrial Average rose 76.71 points (0.29 per cent) to 26,860.20, while the S&P 500 added 13.44 points (0.45 per cent) at 2,993.07 after earlier rising above 3,000 points for the first time.
In the first of two days of congressional testimony, Powell said many central bankers believed the case for lower rates “had strengthened.”
Since the June meeting, when Powell’s dovish remarks were interpreted as signaling a possible cut, “it appears that uncertainties around trade tension and concerns about the strength of the global economy continue to weigh on the US economic outlook,” Powell said.
“I don’t think it’s changed anything. Everyone expected him to cut in July,” said Maris Ogg of Tower Bridge Advisors, who thinks the Fed will undertake a 25 basis point cut in interest rates this month.
“But a cut of 50 basis points is not gonna happen,” Ogg said. “We’re not seeing that much weakness and it would indicate that something is not working well.”
Following the testimony, most investors still predicted a smaller interest rate cut but a solid minority bet on a larger 50 basis point cut.
Large tech shares gained one per