U.S. stocks surged Wednesday — with the Dow Jones Industrial Average up more than 500 points — as a speech by Federal Reserve Chairman Jerome Powell signaled a more dovish approach to raising interest rates.
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In addition, there was rising optimism that a meeting during the G20 gathering between President Trump and Chinese President Xi Jinping could thaw trade tensions between the two countries.
The head of the U.S. central bank said in a speech before the Economic Club in New York that “overall financial stability vulnerabilities are at a moderate level.” President Trump, among others, has been critical of the Fed’s recent interest rate hikes, calculated to prevent inflation from taking root as the nation experiences robust growth.
In early afternoon action, the Dow and the S&P 500 turned positive for November.
Meanwhile, the second revision to 3Q GDP came in as expected, unchanged at 3.5 percent. October new homes sales data will also be released.
On Tuesday, U.S. stocks trimmed early session losses and posted modest gains as shares of several tech companies and retailers paced the broader market.
Investors assessed a downbeat report from the S&P CoreLogic Case-Shiller National Home Price Index, which indicated that the pace of U.S. home price hikes declined in September.
In afternoon trading, several big tech companies, including Microsoft, Amazon and Netflix, began rising, and retailers like Macy’s and J.C. Penney Co. also posted gains, pushing the Dow Jones Industrial Average and S&P 500 into positive territory.
Sentiment was also boosted Tuesday afternoon when Larry Kudlow, Trump’s top economic advisor, told reporters that prospects for a U.S.-China trade were encouraging as reported by FOX Business.