Dow Jones jumps 500 points as Fed chair Powell comments about economy

The Dow Jones jumps after comments by Fed chair Jerome Powell and possible resolutions to tariff disputes.

Trader looking at Dow Jones rising 500 points Source: Bloomberg

The Dow Jones is surging after US Federal Reserve chair, Jerome Powell, said that the central bank could take action to help the US economy.

Powell’s comments boost the Dow Jones

Powell noted in a recent speech that the Fed is watching recent trade developments, including the US-China trade dispute and pending tariffs on Mexican goods.

‘We are closely monitoring the implications of these developments for the US economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labour market and inflation near our symmetric 2% objective,’ said Powell.

Powell hasn’t explicitly said the Fed will change course on its decision to leave interest rates unchanged. However, Keith Lerner, strategist at SunTrust Private Wealth, believes that Wall Street is hoping for an interest rate cut.

‘The market wanted to hear from Powell. When Powell says, "We are watching the market" — whether it’s right or wrong — the market starts believing in a Powell put,’ said Lerner.

Dow Jones rises after possible easing of trade tensions

Though the Fed is concerned about trade conflicts, there may be an easing to the US-China tariff war. A spokesperson for the Chinese Commerce Ministry said that the conflict could end through trade talks, according to a Google translation.

‘The Chinese side always believes that the differences and frictions between the two sides in the economic and trade field will ultimately need to be resolved through dialogue and consultation,’ said the spokesperson.

In addition to the news about China, there may be a resolution to the US-Mexico trade dispute. Mexico’s Deputy Foreign Minister, Jesus Seade, and US Trade Representative, Robert Lighthizer, met to discuss the trade impasse between the two nations, according to a Seade staff member.

Investors are hopeful that Powell’s comments and possible trade negotiations will help the Dow Jones continue to rally.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Take a position on indices

Deal on the world’s major stock indices today.

  • Trade the lowest Wall Street spreads on the market
  • 1-point spread on the FTSE 100 and Germany 30
  • The only provider to offer 24-hour pricing

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
Sell
Buy
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Change
Sell
Buy
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.

All trading involves risk and losses can exceed deposits. Trading CFDs may not be suitable for everyone so please ensure that you fully understand the risks involved. All trading involves risk and losses can exceed deposits.