Dow reclaims 16,000 as stocks fly

Fed Chair Janet Yellen’s calm, confident testimony in front of Congress has inspired a strong rally on Wall Street.

The Dow boasted triple-digit gains today, as new Federal Reserve Chair Janet Yellen restored the confidence of investors on Wall Street in accommodative monetary policy being here for the long haul despite the unemployment rate already knocking on the door of one of the central bank’s thresholds.

There was nothing bold or new in Ms Yellen’s testimony, but her assurances that she would carry on in the same vein as her predecessor has helped to soothe any worries that tightening might be on the horizon. Also supporting equity prices was news that Republicans will be voting on a ‘clean’ debt limit bill (that is, a bill free of any conditions) to raise the debt ceiling for another year.

By early afternoon in New York, the Dow Jones was up 198 points or 1.25% at 16,000, while the S&P 500 rose 1.05% to 1818.8.

Ms Yellen stressed many of the same points made in the most recent Fed statement, saying she strongly supported the current monetary policy of the FOMC, having been one of the people who formulated it, and that if data continues to support the Fed’s outlook for improvements in the jobs market and a return to target for inflation then further tapers would be probable.

She also stressed that if unemployment reaches the Fed’s 6.5% threshold it would not mean any inevitable rate hike, instead it would mean the committee would consider the issue taking into account the state of the broader economy.

This information has been prepared by IG, a trading name of IG Markets 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. See full non-independent research disclaimer and quarterly summary.

Find articles by analysts

Een artikel zoeken

Form has failed to submit. Please contact IG directly.

  • Ik wens per e-mail informatie van IG Group bedrijven te ontvangen over handelsideeën en IG's producten en diensten.

Voor meer informatie over hoe wij uw gegevens mogelijk kunnen gebruiken, bekijkt u ons Privacy- en toegangsbeleid en onze privacy website.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.