The Dow Jones Industrial Average rebounded on Friday after New York Federal Reserve President John Williams suggested the central bank could cut interest rates yet again this year.
The 30-stock index leaped 493.30 points, or 1%, to 46,198.70.
The S&P 500 added 64.24 points, or 1%, to 6,602.99
The NASDAQ popped 195.04 points to 22,273.08.
Stocks that could benefit the most from lower rates boosting consumer spending helped lead the market comeback, including Home Depot, Starbucks and McDonald’s. Investors hope easier monetary policy can revive a sluggish economy and justify historically high tech-stock valuations.
Even with Friday’s moves, the three major averages are still headed for big losses this week. The S&P 500 was down almost 2% week to date, as was the 30-stock Dow. The NASDAQ shed more than 2%.
The comments by a notable Fed member like Williams broke the equity market out of its artificial intelligence-stock slump and raised traders’ bets that the central bank would in fact cut next month for the third time this year.
Fed funds futures traders are currently pricing in a more than 70% chance of a quarter percentage point cut, a spike from the 39.1% likelihood priced in the day before
Prices for the 10-year Treasury gained ground, lowering yields to 4.06% from Thursday’s 4.10%. Treasury prices and yields move in opposite directions.
Oil prices moved downward $1.03 to $57.97 U.S. a barrel.
Gold prices faded $1.30 to $4,058.70 U.S. an ounce.
