U.S. Stocks Rally In Reaction To Powell's Jackson Hole Speech

Stocks have moved sharply higher during trading on Friday, regaining ground after trending lower over the past several sessions. The major averages have all shown strong moves to the upside, with the Dow reaching a new record intraday high.Currently, the major averages are just off their highs of the session. The Dow is up 869.70 points or 1.9 percent at 45,651.20, the Nasdaq is up 433.65 points or 2.1 percent at 21,533.97 and the S&P 500 is up 102.79 points or 1.6 percent at 6,472.96.The rally on Wall Street comes in reaction to Federal Reserve Chair Jerome Powell's highly-anticipated speech before the Jackson Hole Economic Symposium.While Powell touched only briefly on the outlook for monetary policy, his remarks have increased investor confidence that the Fed will lower interest rates next month.Powell noted the labor market remains near maximum employment and inflation has come down a great deal from its post-pandemic high but cautioned "the balance of risks appears to be shifting."He noted interest rates are a full percentage point lower than a year ago and said the "stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance." "Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance," Powell added.The Fed Chief reiterated that monetary policy is not on a "preset course" and stressed that future interest rate decisions would be "based solely on [officials'] assessment of the data and its implications for the economic outlook and the balance of risks."Following Powell's remarks, CME Group's FedWatch Tool is currently indicating an 89.2 percent chance the Fed will lower rates by a quarter point next month, up from 75.0 percent on Thursday.Sector NewsAirline stocks are turning in some of the market's best performances on the day, with the NYSE Arca Airline Index soaring by 5.1 percent to its best intraday level in over five months.Substantial strength is also visible among oil service stocks, as reflected by the 5.0 percent spike by the Philadelphia Oil Service Index. With the surge, the index has reached a four-month intraday high.Housing stocks have also shown a particularly strong move to the upside, driving the Philadelphia Housing Sector Index up by 4.7 percent to its best intraday level in eight months.Networking, semiconductor and banking stocks are also seeing significant strength, moving higher along with most of the other major sectors.Other MarketsIn overseas trading, stock markets across the Asia-Pacific region turned in yet another mixed performance on Friday. China's Shanghai Composite Index jumped by 1.5 percent and Japan's Nikkei 225 Index inched up by 0.1 percent, while Australia's S&P/ASX 200 Index slid by 0.6 percent.Meanwhile, the major European markets have all moved to the upside on the day. While the French CAC 40 Index is up by 0.5 percent, the German DAX Index is up by 0.4 percent and the U.K.'s FTSE 100 Index is up by 0.3 percent.In the bond market, treasuries have moved sharply higher in reaction to Powell's speech. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 7.2 basis points at 4.260 percent. For comments and feedback contact: editorial@rttnews.comBusiness News