Wall Street closed on a high note Friday, with the Dow Jones Industrial Average soaring to a record 45,631.74, fueled by investor optimism following U.S. Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium. Powell’s remarks suggested a potential near-term interest-rate cut, sending markets into a buying spree.
“Powell did what central bankers do best at Jackson Hole — he kept the door open,” said Nigel Green, CEO of deVere Group. “A cut in September would reassure households and businesses that the central bank is not asleep at the wheel. Delaying only raises the odds of a harder landing.”
Investors quickly responded, boosting bets on a September rate cut to nearly 90%, up from about 75% before Powell’s comments. The S&P 500 rose 96.74 points (1.52%) to 6,466.91, while the Nasdaq Composite gained 396.22 points (1.88%) to 21,496.54.
Consumer discretionary stocks led the rally, climbing 3.18%, while the Philadelphia Semiconductor Index surged 2.7%. Among individual gainers, Tesla jumped 6.2%, and Intel rose 5.5% amid news of a potential White House acquisition of a 10% stake. Coinbase also rallied 6.5% as investors bought into crypto-related shares.
Rate-sensitive small caps enjoyed a particularly strong session, with the Russell 2000 Index climbing 4.1% to hit its highest level this year. Ten of the 11 S&P 500 sub-sectors closed higher, helping the S&P 500 break a five-day losing streak after tech stock sell-offs earlier in the week.
For the week, both the Dow and S&P 500 ended with gains, while the Nasdaq fell 0.6% due to rotations out of megacap tech stocks. Markets have been steadily rebounding from April lows, driven by resilient earnings, optimism around trade deals, and growing expectations of Fed rate cuts.
Despite the surge, some analysts urge caution. “Investors are cheering Powell’s comments like it’s the start of a rate-cut parade. But one cut won’t move the needle on consumer spending,” said Zak Stambor, senior analyst at Emarketer. “The bigger question is whether this marks a true pivot in Fed policy or if rising tariffs will force it to slam the brakes before that shift even begins.”
Meanwhile, UBS Global Wealth Management raised its year-end S&P 500 target for the second time in two months, citing corporate earnings strength, easing trade tensions, and expectations of interest-rate cuts.
Among decliners, Intuit dropped roughly 5% after forecasting weaker-than-expected first-quarter revenue, while Workday fell 3% following an in-line outlook. Advancing issues outpaced decliners on the NYSE by a 9.43-to-1 ratio, with 590 new highs recorded on the exchange.
The session’s volume reached 17.93 billion shares, slightly above the 20-day average of 17.08 billion, signaling broad participation in the market rally.
