Wall Street rallied on Friday after US Federal Reserve Chair Jerome Powell signaled a possible interest rate cut in September, pushing the dollar lower against major currencies.
Speaking at the annual Jackson Hole symposium, Powell announced that the Fed would return to a “traditional framework” focused on price stability and flexible inflation targeting, moving away from pandemic-era policies.
He noted that inflation has eased from its 2021 highs but warned of rising employment risks, which could worsen quickly. Markets viewed his remarks as dovish, fueling optimism.
The Dow Jones surged 902 points (2.02%) to a record 45,688. The S&P 500 gained 1.63%, its best single-day rise since May, while the Nasdaq jumped nearly 2%. Small-cap stocks outperformed, with the Russell 2000 climbing 3.9%.
Consumer discretionary, industrials, semiconductors, and big tech led gains. Tesla soared almost 5%.
Meanwhile, the dollar index slipped 0.9% to 97.7, with the euro and yen strengthening nearly 1%. Futures trading now shows a 90% chance of a September rate cut, up from 72% earlier.
Powell stressed that policy would remain data-driven, highlighting upcoming jobs and inflation reports. He rejected the Fed’s 2020 “makeup” strategy that allowed inflation overshooting.
Analysts called his Jackson Hole speech clear and dovish, with markets expecting cuts but uncertain about the Fed’s pace.
Gold prices in Pakistan, however, dropped by Rs1,500 per tola in the local market.
In crypto side, already Bitcoin Surged to Record High, Surpassing January Peak
