- The S&P 500 hit a record high as traders took in Jerome Powell's comments on 2024 rate cuts.
- Powell kicked off a second day of congressional testimony at 10 a.m. ET.
The S&P 500 hit a record high Thursday as investors took in Federal Reserve Chair Jerome Powell's second day of comments before Congress, in which he reaffirmed his view for interest-rate cuts to begin in 2024.
The benchmark index hit the high on an intraday basis of 5,155.37 after the central-bank chief said again that the Fed was looking to lower interest rates in 2024.
Powell noted that there had been "big declines" in core inflation figures but said the Fed would like to see more progress here. He also nodded to the apparent strength of the economy in the face of tighter financial conditions, adding that it was a "big surprise" to see inflation come down without a spike in unemployment.
On Wednesday, Powell told the House Financial Services Committee that the Federal Reserve's policy rate was at its "peak for this tightening cycle," though he added that rate cuts were not yet imminent.
On Thursday, Powell said the Fed "can and will" start the easing cycle this year.
"Given the Fed's extreme data dependence, the fact that noisy January data is not fit for policy calibration and the fact that most policymakers have retained a hawkish bias in their recent communication, the odds now clearly favor a June onset of the policy easing cycle, rather than a May onset as had been our base case for the past year," Gregory Daco, EY's chief economist, said in a note, adding that the firm expected a rate cut in June.
Meanwhile, jobless claims on Thursday clocked in at 217,000 for the week to March 2, according to the Labor Department, in line with expectations. Continuing claims came in just above 1.9 million, about 8,000 higher from its prior reading and also in line with expectations, per FactSet.
Nonfarm payrolls are set to be reported on Friday and will be the next data point for the Fed to comb through for signs the economy is sufficiently cool to warrant cutting interest rates. Expectations are for employers to have added 198,000 jobs last month, lower than the blowout 353,000 reported in January.
Overseas, the European Central Bank chose Thursday to hold its benchmark rates steady, and policymakers lowered their forecast for economic growth.
Here's where US indexes stood shortly after 11:15 a.m. in New York on Thursday:
- S&P 500: 5,148.13, up 0.86%.
- Dow Jones Industrial Average: 38,768.42, up 0.32% (plus 125.37 points).
- Nasdaq composite: 16,213.89, up 1.13%.
Here's what else is going on:
- Palantir's stock spiked on Wednesday after the artificial-intelligence firm signed a deal with the US Army.
- US sanctions pushed a key Turkish oil terminal to halt Russian imports.
- Milton Berg, a technical analyst, said the S&P 500 might crash 60% and that a recession was looming.
- Bullish tech bets are at the highest in three years, Citi said.
In commodities, bonds, and crypto:
- Oil prices dropped, with West Texas Intermediate down 0.85% to $78.46 a barrel. Brent crude, the international benchmark, moved lower 0.47% to $82.57 a barrel.
- Gold edged higher 0.3% to $2,158.90 an ounce.
- The 10-year Treasury yield climbed by about 1 basis point to hover at 4.116%.
- Bitcoin climbed 0.04% to $67,222.