US stocks held near all-time highs on Wednesday as Jerome Powell’s remarks to the Senate buoyed rate-cut hopes, with the Federal Reserve chair set to return to Congress for another day of testimony.
S&P 500 futures (ES=F) rose roughly 0.2%, coming off a 36th record close for the benchmark. Dow Jones Industrial Average futures (YM=F) wobbled along the flatline, while contracts on the tech-heavy Nasdaq 100 (NQ=F) edged 0.3% higher.
Bets on interest-rate cuts have helped stocks eke out fresh all-time highs, as signs of slowing in the US economy pile up. The S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) both logged six closing wins in a row.
In his policy update on Tuesday, Powell hinted the stage is almost set for lowering interest rates from two-decade highs, pointing to cooling in inflation and the jobs market. He also cautioned that keeping rates elevated for too long could weaken the economy, giving hope to rate cut-hungry investors.
The focus is now on Powell’s appearance in the House on Wednesday for part two of his twice-yearly policy update. Investors will be on the alert for clues to whether bets that two rate reductions are coming this year are well-placed.
But a key test for stocks and rate-cut prospects still lies ahead, in the crucial consumer inflation report due on Thursday. While a cooler reading will cement in the likelihood of a Fed policy shift in September, a too-cool print is seen as potentially reviving concerns about a recession and the labor market.
Meanwhile, TSMC (TSM) shares popped after the Taiwanese chipmaker’s second-quarter sales grew at their fastest pace since 2022, thanks to the AI boom. In other corporate news, Microsoft (MSFT) and Apple (AAPL) dropped plans to take observer board seats at OpenAi as antitrust scrutiny heats up.
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