Alex Veiga, The Associated Press
Published Tuesday, July 9, 2019 11:54PM EDT
Last Updated Wednesday, July 10, 2019 10:47AM EDT
U.S. stocks marched broadly higher in early trading Wednesday, sending the S&P 500 index into record territory, after the head of the Federal Reserve signalled that the central bank is ready to cut interest rates for the first time in a decade.
In his semi-annual monetary report to Congress, Fed Chairman Jerome Powell said that many Fed officials believe a weakening global economy and rising trade tensions have strengthened the case for a rate cut. The market rallied through much of June after the Fed first signalled that it might cut rates if necessary to shield the U.S. economy.
An unexpectedly strong U.S. jobs report Friday briefly dimmed investors’ expectations, sending stocks on a two-day skid. But Powell’s statement on Wednesday allayed those concerns, sending stocks sharply higher.
Technology companies and communications services stocks drove much of the gains. Western Digital rose 3.3% and Take-Two Interactive climbed 2.5%.
Energy stocks also headed higher as the price of U.S. crude oil climbed 3%. Exxon Mobil gained 1.3%.
Bond prices rose sharply, sending the yield in the 10-year Treasury note down to 2.06% from 2.10% shortly before Powell’s remarks were released at 8:30 a.m. Eastern Time.
The higher yields pushed bank shares higher. Rising bond yields drive the interest rates that lenders charge for mortgages and other loans higher. American Express rose 1.8%.
Real estate and utilities stocks lagged the market as investors shifted money out of less risky assets.
KEEPING SCORE: The S&P 500 index rose 0.6% as of 10:07 a.m. Eastern time. The benchmark index briefly moved above 3,000 for the first time.
The Dow Jones Industrial Average gained 164 points, or 0.6%, to 26,947. The Nasdaq added 0.9% and the Russell