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the Dow (UNDUE) is up about 400 points, or 1.6% – its best day since mid-February. The Nasdaq also left the correctional territory after a miserable Monday.
the Nasdaq Composite (COMP) abandoned Monday on concerns about a possible regulatory crackdown on large technology companies. The index was up about 1.9%, wiping out all yesterday's losses.
the S & P 500 (SPX)a, meanwhile, progressed by 1.5%, constituting his best gain in a day since January 30.
Just last week, this picture was very different. The trade war put pressure on stocks. The proposed tariffs on Mexican imports into the United States are expected to come into effect on Monday.
But investors have dismissed these fears. US markets opened higher and these gains accelerated after Federal Reserve Chairman Jerome Powell said the central bank was closely following developments in the trade situation.
"As always, we will act appropriately to continue the expansion," said Tuesday at a monetary policy conference in Chicago.
Powell's statements come one day after St. Louis Fed President James Bullard said the central bank may have to cut interest rates soon due to fears of low inflation and risks to growth economic.
Although Powell did not echo Bullard's more explicit expectations for a rate cut, investors seem to have heard everything they needed.
According to the WEC's FedWatch tool, market expectations regarding a reduction in interest rates at the Fed's July meeting are 55%. In December, the odds are 97%.
Hope for interest rate cuts was already high before Bullard and Powell's comments this week, said Chris Rupkey, chief financial economist for MUFG. They climbed further after President Donald Trump threatened Mexico with tariffs.
Economic data shows no signs of a recession in economic data, Rupkey added, which would be a traditional reason for the Fed to lower rates.
Trump has long called on the central bank to cut rates to stimulate the economy.
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