Wall Street Ends the Week on a High Note Following Signals of Fed Rate Cuts

Bonds fell, and stocks rose after Federal Reserve Chairman Jerome Powell announced that the time had come to adjust monetary policy, emphasizing that the direction was clear, though the extent of the adjustment remained uncertain.

Wall Street’s three main indexes posted strong gains this Friday. The averages climbed after the highly anticipated speech by Federal Reserve (Fed) Chairman at Jackson Hole, where he touched on the potential for a rate cut in September.

The leading Dow Jones index, comprised of 30 major companies, advanced 1.14% to 41,175.08 points. The S&P 500, which includes 500 stocks, rose 1.15% to 5,634.61 points. The tech-heavy Nasdaq Composite led the rally, climbing 1.47% to 17,877.79 points.

In weekly performance, small-cap companies and regional banks outperformed the broader market, as they stand to benefit from a lower interest rate environment—a move that has largely been anticipated.

Next week, the Fed will have several economic indicators to consider before its September decision, including the revised second-quarter GDP and the key PCE price index, the Fed’s preferred inflation measure.

All three indexes ended the week with cumulative gains. The Dow Jones rose by 1.27%, the S&P 500 advanced by 1.45%, and the Nasdaq recorded a 1.40% increase.