Stock market news for August 23, 2024

Stocks rose Friday after Federal Reserve Chair Jerome Powell indicated interest rate cuts were on the horizon.

The Dow Jones Industrial Average climbed 462.30 points, or 1.14%, to 41,175.08. The Nasdaq Composite advanced 1.47% to 17,877.79. The S&P 500 gained 1.15% to finish at 5,634.61, back within striking distance of all-time highs set last month.

With Friday’s gains, the three major averages also posted a winning week. The Dow surged nearly 1.3%, and the Nasdaq added 1.4%. The S&P 500 rose 1.45% for the period.

Stocks took a leg up Friday morning after Powell signaled decreases to interest rates ahead during his speech in Jackson Hole, Wyoming. But Powell did not provide specific information on when, or by how big any cuts to the borrowing cost would be.

“The time has come for policy to adjust,” Powell said during the Fed’s annual retreat. “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook and the balance of risks.”

That pleased traders, who are unanimous in betting on a rate cut at the September meeting, according to the CME Group’s FedWatch Tool. But there is less consensus over how big that decrease will be.

Technology stocks rallied with particular strength as investors grew hopeful that a lower-rate environment would benefit this group. Notably, Tesla and Nvidia jumped more than 4% each.

Small-cap stocks also gained on this outlook, with the Russell 2000 advancing more than 3%.

“The market is kind of breathing a sigh of relief” after Powell and other Fed speakers, said Skyler Weinand, chief investment officer at Regan Capital.

“The market sees: ‘All right, the cycle has changed,'” he said. “We haven’t taken a 180 per se, but we’ve taken a right turn towards an easing cycle.”