Stocks in the United States continued to strengthen today, with the broader S&P 500 index closing at a new high. Growth and technology companies did well. Investors are optimistic about the possibility that the US Federal Reserve (Fed) will start to cut its benchmark interest rate. In the foreign exchange market, the US dollar was cheaper.
Fed Chief’s Remarks Drive Dow Jones and Market Confid
The Dow Jones index, which includes shares of thirty leading US companies, rose 0.34 per cent today to end trading at 38,791.35 points. The broader S&P 500 index gained 1.03 per cent to a record 5,157.36 points and the Nasdaq Composite index, which includes many companies in the high-tech sector, rose 1.51 per cent to 16,273.38 points.
Fed chief Jerome Powell said the U.S. central bank is “not far off” from believing inflation is falling toward its 2 percent target, which would allow for a rate cut. His comments reinforced investor hopes that the first rate cut could come in June. Lower interest rates are making credit cheaper for companies.
Powell “essentially left a rate cut on the table for this year. That’s what the markets wanted to hear,” said analyst Anthony Saglimbene of Ameriprise Financial.
Dollar Weakens Against Euro Amid Rate Cut Speculation
In the foreign exchange market, the dollar weakened today while the euro thrived. It was Powell’s statement that the central bank could soon gain confidence that inflation is close to its target and it will be able to start cutting rates that weakened the US currency. The euro was then helped by the European Central Bank’s (ECB) decision today to leave the key interest rate unchanged at a record high.
Shortly before 22:00 GMT, the dollar index, which measures the value of the dollar against a basket of six major world currencies, lost 0.5 percent to 102.83 points. The euro added 0.4 percent to the dollar to $1.0946.
Source: čtk
