US stocks rise after Powell signals rate cut, says he will keep labor market strong

Here’s the current state of stock markets after Powell’s Jackson Hole speech:

• S&P 500 rises 1.3%
• The Nasdaq rose 1.8%.
• The Russell 2000 index rose 2.2%.
• Dow Jones Industrial Average +1.0%

There is some resistance in the S&P 500 right now as it challenges yesterday’s opening high. If that level doesn’t break, be careful with profit taking despite the dovish rhetoric.

You could argue that markets have priced in a lot of this from the gains they made in nine of the 11 days leading up to the speech. However, more buying on the dips is expected with the Fed in place.

The Fed has now set interest rates at 32%, down 50 basis points, compared to 25% before the speech.