Wall Street rallied on Friday, pushing the S&P and the Nasdaq to record closing highs for the fourth time this week, as US Federal Reserve Chairman Jerome Powell’s remarks at the Jackson Hole Symposium calmed fears over the tapering timetable and sent investors into the weekend in a buying mood.
All three indexes posted weekly gains.
“I see two things happening,” said Mike Zigmont, head of research and trading at Harvest Volatility Management in New York. “I see a reflexive dip-buying validation and I see the market embracing a dovish Fed.”
Regarding the indexes’ recent string of all-time highs, including the S&P 500’s 52nd record high close so far this year, Zigmont said “The march north has been very consistent. The drawdowns are super shallow, and the recoveries are very fast.”
In his prepared remarks, Powell stopped short of providing a clearer picture regarding the timing of the central bank’s tapering of asset purchases or hiking interest rates, the key elements of its dovish monetary policy aimed at helping the economy recover from the pandemic recession.
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“The market is very happy that the Fed is pumping more liquidity into the economy every month,” Zigmont added. “The Fed is enabling asset prices to climb and the market is pleased with that.”
Economic data released on Friday delivered, in large part, precisely what economists expected - a pullback in consumer spending and sentiment due to the Covid-19 Delta variant, and signs that the current wave of price spikes will not morph into long term inflation, in-line with Fed assurances.
The Dow Jones Industrial Average rose 242.68 points, or 0.69%, to 35,455.8, the S&P 500 gained 39.37 points, or 0.88%, to 4,509.37 and the Nasdaq Composite added 183.69 points, or 1.23%, to 15,129.50.
Ten of the 11 major sectors of the S&P 500 advanced, with energy shares enjoying the largest percentage gain.
Chipmaker Nvidia’s shares rose 2.6% after sources said it would likely seek antitrust approval from the European Union to take over British chip designer Arm.
Published in The Express Tribune, August 29th, 2021.
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