The Dow rallies, jumps more than 600 points in best session since March after Fed chairman speech

AP Photo/Richard Drew

Stocks surged Wednesday after Federal Reserve Chairman Jerome Powell gave a speech that was received as more dovish than expected, lifting Wall Street to its best day in months after a series of bruising sell-offs in October and November.

The Dow Jones Industrial Average jumped 2.5%, or more than 600 points, marking its best day since March. The Nasdaq Composite gained 212 points, or 3%, and the S&P 500 was up 61 points, or 2.3%.

Powell said Wednesday that corporate credit levels and quality are top risks to the economy, but the outlook remains solid, and rates are “just below” a neutral level.

“These comments tilt the odds just slightly in favor of fewer hikes in 2019,” said Adam Ozimek, an economist at Moody’s. “This is good news given that the economy is adding jobs quickly alongside a lack of accelerating inflation.”

Market watchers will continue to monitor for signs of whether recent turbulence in equity markets or ongoing trade tensions could influence the Federal Reserve’s rate path in meeting minutes out Thursday.

Treasury yields, which can point to market expectations for interest rates, fell following Powell’s speech. The 10-year shed 1.3 basis points to 3.046%, and the 2-year was down 2.6 basis points to 2.805%.

Trade-sensitive stocks, including Boeing (up $15, or 4.8%) and Caterpillar (up $6, or 5%), led the Dow higher. President Donald Trump and Chinese President Xi Jinping are expected to meet at the G20 in Argentina on Saturday, with tariff escalations between the world’s largest economies on the line.

On Tuesday, The New York Times reported that Trump is worried about the long-term effects his trade policies could have on the market and the economy. Still, the president told The Wall Street Journal this week that he expects to increase tariff

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