S&P 500 surges 1% to record high as investors hope for Fed rate cut
The S&P 500 and Dow Jones rise after optimism about Fed rate cuts and US-China talks.
The S&P 500 jumped to a record high of 2,954.18 and the Dow Jones rose almost 250 points. Investors were optimistic that the US Federal Reserve will cut interest rates later this year.
Fed comments give investors hope
Though the Fed kept interest rates steady, the US central bank said that it could take action if necessary to lift the US economy. Many investors and economists are hopeful about a future rate cut helping the US stock market. However, Jake Dollarhide, chief executive officer (CEO) of Longbow Asset Management, warns that escalating US-Iran tensions could make any S&P 500 growth short-lived.
‘This new high on the S&P 500 could be fool’s gold. We have this simmering tension in Iran that could spill over and create all kinds of global fears,’ said Dollarhide.
Revival of US-China trade talks boosts Dow Jones
The Dow Jones is also reacting positively to pending trade talks between the US and China. China's Commerce Ministry spokesperson, Gao Feng, said that trade representatives from the two nations will meet.
‘The heads of the two trade teams will communicate, according to instructions passed down from the two presidents [of the US and China],’ said Feng.
Sian Fenner, chief Asia economist at Oxford Economics, says that an end to the US-China tariff war would be the ideal outcome of the upcoming summit to calm global economic tensions.
'It is positive that they’re [the US and China] talking again. What we would be hoping is that at least we will see an easing in tensions so we won’t be seeing any further tariff hikes,’ said Fenner.
Investors will watch the Fed and international events to see how they impact the Dow Jones and S&P 500.
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