US stocks jumped after Federal Reserve Chairman Jerome Powell said that interest rate increases could be further measured in the future.
The Dow Jones Industrial Average jumped more than 617 points, or 2.5%, posting the best gain in three days since 2016, with an addition of 111.22 points, or 4.22%, according to the Dow Jones Market Group Data. The S & P 500 and Nasdaq Composite also jumped more than 2% per piece.
|I: DJI||DOW JONES MEANS||25366.43||617.70||+ 2.50%|
|SP500||S & P 500||2743.79||61.62||+ 2.30%|
|I: COMP||COMPOUND INDEX NASDAQ||7291.5921||+208.89||+ 2.95%|
"We know that an action too fast could shorten the expansion. We also know that if we move too slowly – keeping interest rates too low – for too long, we risk further distortions in the form of higher inflation or destabilizing financial imbalances. Our gradual growth path has been designed to balance these two risks, which we both need to take seriously, "Powell said in a speech prepared at the Economic Club in New York.
Powell also said: "Interest rates are still low by historical standards and they stay just below the wide range of estimates of the level that would be neutral for the economy – that's all. that is, no acceleration or slowdown in growth, "he said.
The stock market rally follows months of sad Fed talks with President Trump, most recently on Tuesday.
"I'm doing business and I'm not accommodated by the Fed," Trump said in an interview with the Washington Post. "Until then, I'm not even happy with my selection of Jay. Not even a little. And I do not blame anyone, but I just tell you that I think the Fed is not up to what it does, "he added.
Has the Fed presidency blinked after Trump's attacks? Harvard economist Martin Feldstein, who moderated Powell's Wednesday speech, said investors risk interpreting "this interpretation" when asked to define Powell's description of interest rates. an interview with FOX Business.
He also said the Fed should continue to raise interest rates. Investors seem to expect policymakers to make the fourth rate hike scheduled for December in December and another three expected in 2019.
The comments ignited a fire under US stocks, which changed little before his speech. The rally brought the Dow and S & P 500 back to positive territory for the year with gains of around 2.6% each, with the Nasdaq Composite building on its modest annual gains, which have now risen 5, 6%.
"Maybe they [the Fed] we see something we do not see, "said Teddy Weisberg, founder of Seaport Securities, speaking to FOX Business from the New York Stock Exchange floor where the volume was above average with more than 3.9 billion shares traded.
In economic terms, the second revision of the third quarter GDP was completed as planned, unchanged at 3.5% and remaining growth of 4.2% in the second quarter.
As for commodities, world oil prices continued to suffer, with West Texas Intermediate closing at around $ 50 per barrel. Nymex crude has lost 23% since the beginning of the month.