After a terrible week for US tech stocks, Wall Street roared back on Friday as Federal Reserve Chair Jerome Powell signalled a September rate cut may be on the table.
The Dow Jones jumped nearly 2% to an intraday record, the S&P 500 rose 1.6%, and the Nasdaq Composite surged 1.9% as investors piled back into equities. The rebound followed a tech-led selloff earlier in the week, with AI trade doubts weighing heavily on sentiment.
Speaking at Jackson Hole, Powell said the Fed’s “baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.” His remarks sent rate-cut bets sharply higher, with traders now pricing in over 90% odds of a September move, compared with 70% just hours before his speech.
The Fed chair also flagged inflation risks, warning that tariff-related pressures are “clearly visible.” Even so, markets seized on his willingness to cut rates, driving the surge across major indices.
Political noise also added to the backdrop. President Trump escalated his attacks on the central bank, demanding Fed governor Lisa Cook resign over alleged mortgage fraud, even though the White House lacks the authority to dismiss her.
For Wall Street, though, the message was clear: Powell has left the door open, and stocks sprinted through it.
