NEW YORK: US stocks ended a volatile session higher on Friday as investors digested comments from Federal Reserve Chair Jerome Powell that the US central bank may need to raise interest rates further to ensure inflation is contained.
Powell also acknowledged that price pressures have eased in his much-anticipated morning speech at the Economic Policy Symposium at Jackson Hole, Wyoming.
The major US indexes, which started the day with solid gains, alternated between extending and paring those gains for much of the session.
According to preliminary data, the S&P 500 gained 29.01 points, or 0.66%, to end at 4,405.32 points, while the Nasdaq Composite gained 125.16 points, or 0.93%, to 13,589.13. The Dow Jones Industrial Average rose 244.58 points, or 0.73%, to 34,344.00.
Powell “is demonstrating that he is pleased with how far monetary policy has come and how inflation has been reduced. But he is still holding on tightly to this notion that they are watching it carefully and they still have work to do,” said Michael Arone, chief investment strategist at State Street Global Advisors in Boston. The Fed has been raising rates in an effort to bring down inflation. Following Powell’s comments, expectations of a rate hike in November rose from a day earlier, according to CME Group’s FedWatch tool. Most traders still expect the Fed to hold off on hiking in September.
All of the major S&P 500 sectors ended higher, with energy, consumer discretionary and technology among the top gainers.
The S&P 500 and Nasdaq also ended higher for the week, with the market gaining in the run up to Nvidia’s second-quarter results. The company, which makes chips meant for artificial intelligence tasks, gave another upbeat forecast with its late Wednesday report.
Retailers were mixed following recent results. Gap rose after the company beat second-quarter profit estimates, while Nordstrom was down after the department store chain left its forecasts unchanged.
Shares of Hostess Brands shot up after Reuters reported, citing people familiar with the matter, that the maker of Twinkies snacks is exploring a sale.
Shares of Marvell Technology fell after the chipmaker posted a fall in second-quarter revenue.
Hawaiian Electric, which has come under scrutiny over its possible role in the Hawaii wildfires, dropped after the county of Maui sued the power company.