US stocks are rising on the back of rising interest rates

Sheriff Adel (Washington)

US stocks rose on Friday, supported by comments from Federal Reserve Chairman Jerome Powell, in which he indicated that US interest rate cuts were on the horizon, marking the start of a new cycle of monetary policy easing in the world’s largest economy. the world , which will be the first since the pandemic year.
In trading on the last day of the week, the Dow Jones industrial average rose 462.30 points, representing 1.14% of its value, and the Nasdaq Composite Index advanced 1.47% to 17,877.79, while Index- the Standard & Poor’s 500 added 1.15%, closing at 5,634.61, approaching all-time highs it recorded last month. With Friday’s gains, the three major indexes managed to end the week in the green zone, with the Dow Jones index rising around 1.3%, the Nasdaq index adding 1.4%, and The Standard & Poor’s 500 index rose 1.45% during that period. . Stocks rose on Friday morning after Powell, in a speech at a central bank conference in Jackson Hole, Wyoming, indicated that he expected lower interest rates in the future, although he did not provide specifics on when or the amount of any future reductions. cost of borrowing. “We are not seeking or welcoming further stabilization of labor market conditions,” Powell said. It is time to change the policy. “The path in which inflation will move is becoming clear, and the timing and pace of interest rate cuts will depend on incoming data, emerging expectations, and the balance of risks.” Powell’s words pleased investors, whose futures prices indicated an agreement to bet on a cut in interest rates at the September 18 meeting, according to the Federal Reserve’s Chicago Mercantile Exchange, although not they agreed on the size of this cut. At the same time, those words appeared to mark the end of the Fed’s historic anti-inflation campaign, a campaign that Powell announced from the same spot two years ago, when he indicated his willingness to accept recession as the price of reducing inflation.
On Friday, shares of technology companies rose strongly, with investors increasingly expecting the sector to benefit the most from the low interest rate environment. the same expectation, as the Russell Index advanced in 2000 by more than 3%. “The market is kind of breathing a sigh of relief,” said Skylar Weinand, chief investment officer at Regan Capital, after comments from Powell and other Fed speakers. He said: “The market believes that we have reached the end of the interest rate hike cycle, and that we are on our way to a new (decline) cycle. We didn’t take a 180-degree turn, but we took a right turn to a traffic circle.”