U.S. stocks experienced a significant surge on Friday, driven by Federal Reserve Chair Jerome Powell's remarks at the Jackson Hole Symposium, suggesting a potential rate cut in September. This news fueled the most robust cross-asset rally since April. The S&P 500 increased by 1.5%, the Nasdaq rose by 1.9%, and the Dow Jones soared by 846 points, reaching a record intraday high.
During his speech at the prestigious annual symposium, Powell highlighted the evolving economic risks that "might require adjustments to our policy stance," although he cautioned about ongoing inflationary pressures. In response, traders substantially increased their expectations, currently estimating a 91% chance of a 25 basis point cut in September.
Technology stocks led the rally's momentum, with Tesla surging 6.2% and giants like Meta, Alphabet, and Amazon each appreciating by over 2%. Nvidia also climbed by 1.7%. Notably, Intel's stock jumped 5.5% amid reports of the Trump administration potentially acquiring a 10% stake in the company.
This rally helped the markets rebound from earlier declines linked to weakness in megacap tech stocks, resulting in weekly gains for the Dow and S&P 500 while significantly reducing the Nasdaq's losses.
