Market Snapshot: U.S. stocks rise in volatile trade as Powell hints at possibility of more rate hikes

by | Aug 25, 2023 | Stock Market

U.S. stocks were higher in choppy trade Friday after Federal Reserve Chairman Jerome Powell warned that the central bank may need to raise interest rates even higher to temper a strong U.S. economy and quell inflation, while assuring investors that policy would proceed cautiously. What’s happening
The Dow Jones Industrial Average
was up 163 points, or 0.5%, at 34,265.

The S&P 500
gained 13 points, or 0.3%, at 4,389.

The Nasdaq Composite
advanced by 20 points, or 0.2%, to 13,485.

On Thursday, the S&P 500 and Nasdaq Composite saw their biggest daily decline since Aug. 2, according to FactSet data. Meanwhile, the Dow Jones Industrial Average fell nearly 375 points, its biggest drop since March 22.

What’s driving markets Powell’s message to investors during Friday’s Jackson Hole speech was that inflation is still too high for the Fed’s liking, and it may warrant more interest rate hikes in the not-too-distant future. Whatever happens though, Powell said the Fed will proceed cautiously with a careful eye on incoming economic data. The Fed chief’s comments about the progress made on taming the worst inflationary wave in decades helped inject his speech with a dovish veneer, some analysts said, but his warning about the prospect of more hikes initially helped undermine stocks, which slipped into the red following his speech. Meanwhile, in the Treasury market, 2-year yields edge higher
while 10-year yields
remained subdued, a sign that investors expect Powell to follow through with his promise to cool the economy, said Joe Ferrera, inve …

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