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Wall Street’s main indexes rose on Tuesday, with the S&P 500 and Nasdaq up more than 1% following comments from Federal Reserve Chair Jerome Powell that were perceived to be less hawkish than expected.
In a Q&A session at the Economic Club of Washington, Powell stated that he anticipates “substantial decreases in inflation” to occur in 2023.
According to Joe Saluzzi, co-manager of trading at Themis Trading in New Jersey, “He’s (Powell) not saying anything that would make you think he’s going to raise rates more than what the market is anticipating at this moment.”
“If you had seen that jobs report, would you have done something differently?” was the first question the interviewer asked him, and it didn’t sound like he would have.”
The Fed increased interest rates by 25 basis points last week, and the markets are now pricing in a peak rate above 5% after statistics on Friday revealed that the U.S. economy generated jobs quickly in January.
The Dow Jones Industrial Average increased by 253.68 points, or 0.75%, to close at 34,144.70 at 12:58 p.m. ET. The S&P 500 increased by 48.93 points, or 1.19%, to close at 4,160.01, while the Nasdaq Composite increased by 207.82 points, or 1.75%, to close at 12,095.27.
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