Dow Jones jumps 500 points as Fed chair Powell comments about economy
The Dow Jones jumps after comments by Fed chair Jerome Powell and possible resolutions to tariff disputes.
The Dow Jones is surging after US Federal Reserve chair, Jerome Powell, said that the central bank could take action to help the US economy.
Powell’s comments boost the Dow Jones
Powell noted in a recent speech that the Fed is watching recent trade developments, including the US-China trade dispute and pending tariffs on Mexican goods.
‘We are closely monitoring the implications of these developments for the US economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labour market and inflation near our symmetric 2% objective,’ said Powell.
Powell hasn’t explicitly said the Fed will change course on its decision to leave interest rates unchanged. However, Keith Lerner, strategist at SunTrust Private Wealth, believes that Wall Street is hoping for an interest rate cut.
‘The market wanted to hear from Powell. When Powell says, "We are watching the market" — whether it’s right or wrong — the market starts believing in a Powell put,’ said Lerner.
Dow Jones rises after possible easing of trade tensions
Though the Fed is concerned about trade conflicts, there may be an easing to the US-China tariff war. A spokesperson for the Chinese Commerce Ministry said that the conflict could end through trade talks, according to a Google translation.
‘The Chinese side always believes that the differences and frictions between the two sides in the economic and trade field will ultimately need to be resolved through dialogue and consultation,’ said the spokesperson.
In addition to the news about China, there may be a resolution to the US-Mexico trade dispute. Mexico’s Deputy Foreign Minister, Jesus Seade, and US Trade Representative, Robert Lighthizer, met to discuss the trade impasse between the two nations, according to a Seade staff member.
Investors are hopeful that Powell’s comments and possible trade negotiations will help the Dow Jones continue to rally.
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