Jerome Powell Speech Sends Dow Soaring Nearly 900 Points On Surging Rate Cut Hopes

Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole summit sent the Dow Jones Industrial Average soaring to a record high in Friday morning’s trade as rising rate cut hopes buoyed investor sentiment.

At the time of writing, Dow Jones was up 2% or nearly 900 points, while the S&P 500 gained 1.6%, and the Nasdaq rose around 2%.

The SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 1.6%, while the Invesco QQQ Trust (QQQ) surged 1.72%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bullish’ territory.

The surge in U.S. equities comes after Powell’s Jackson Hole speech raised the hopes of an interest rate cut–while the quantum is unclear, the CME FedWatch tool shows the probabilities of a 25-basis-point cut at 89.2% at the time of writing, surging from 71.3% earlier on Friday. However, it is still down from 94% last week.

While Powell said the economic conditions right now “may warrant” careful interest rate cuts from the central bank, he warned that President Donald Trump’s tariffs are leading to an increase in risks of inflation surging again. The commentary about these risks also featured in the minutes of the Federal Open Market Committee’s (FOMC) July meeting.

On the other hand, President Trump and Treasury Secretary Scott Bessent have kept the pressure up on Powell to cut rates. After Fed Governors Michelle Bowman and Christopher Waller dissented following the central bank’s decision to keep rates unchanged, Trump said the dissent will “only get stronger,” while slamming Powell as “Too Late.”

Also See: Powell Speech Today At Jackson Hole: Fed Chair Says That Conditions ‘May Warrant’ Careful Interest Rate Cuts

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