Market Snapshot: Stocks gain as Fed's Powell offers dovish testimony
U.S. stocks rose Wednesday, though off session highs at midday, after testimony by Federal Reserve Chairman Jerome Powell before Congress was seen indicating a likely interest rate cut later this month.
What’s driving the market? Investor sentiment was buoyed by the publication of Powell’s remarks before the House Financial Services Committed in which the Fed Chairman emphasized rising risks to the U.S. economy from trade policy and slowing global growth, as well as falling price inflation. “A rate cut in July is now all but certain,” Aberdeen Standard Investments senior global economist, James McCann, wrote. “The strength of last week’s jobs number did lead some to think that the Fed may pause for thought. It’s clear from [Powell’s testimony] that they won’t.”
While Powell’s statement seemed to confirm that the Fed will cut interest rates in July, questions remain as to the magnitude of the cut, or plans for further reductions in interest rates during the remainder of the year. Aside from Powell’s testimony, the economic calendar also features the release of minutes of the Fed’s last policy meeting at 2 p.m. Eastern Time.
Levi Strauss & Co. LEVI, -11.84% released reported second-quarter earnings Tuesday evening, reporting declining earnings that fell lower than analyst expectations. Shares fell 9.6% Wednesday morning.
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