NEW YORK: The S&P 500 and the Nasdaq rose for an eighth straight session on Monday as concerns around an impending recession abated and markets zeroed in on Federal Reserve Chair Jerome Powell’s speech at Jackson Hole later this week.
All three indexes notched up their best week of the year on Friday - a sharp turnaround from an equities selloff earlier in the month triggered by July unemployment data that fanned worries about the health of the world’s biggest economy.
The S&P 500 has recovered to levels last seen before the July jobs report, while the Dow and Nasdaq sit about 0.2% and 0.5% off, respectively.
Goldman Sachs lowered the odds of the United States slipping into a recession in the next 12 months to 20% from 25% following the latest weekly jobless claims and retail sales reports.
At 11:41 a.m. ET, the Dow Jones Industrial Average rose 189.14 points, or 0.47%, to 40,848.90, the S&P 500 gained 22.83 points, or 0.41%, to 5,577.08 and the Nasdaq Composite gained 69.65 points, or 0.40%, to 17,701.37.
All 11 S&P 500 sectors advanced, with energy adding nearly 1% to lead gains. Communication services was the second-biggest advancer, helped by Alphabet’s 1.4% rise.
Minutes from the Fed’s last policy meeting are due on Wednesday, and Powell will speak at the economic symposium in Jackson Hole on Friday, with investors keeping an eye out for any signs of acknowledgment of a rate cut in September.
“The Fed has recently mentioned how the risk of being too tight for too long, and not restrictive enough are roughly equal, so any “Fedspeak” one way or another could prompt markets to see one risk as more prominent than the other,” said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.
Traders currently see a 77.5% chance of the Fed cutting interest rates by 25 basis points (bps) in September, compared with an even split between a 50 and 25 bps cut seen a week ago, according to the CME FedWatch Tool.The CBOE Volatility Index, or Wall Street’s “fear gauge”, was last at 14.69, retreating from a four-year high seen two weeks ago.
Among other stocks, Advanced Micro Devices rose close to 3% after the chipmaker said it plans to acquire server maker ZT Systems for $4.9 billion, aiming to expand its portfolio of artificial intelligence chips and hardware to compete better with Nvidia.
B. Riley Financial slid 5.6% following a drop of over 65% last week. Co-founder and co-CEO Bryant Riley had offered to buy the bank on Friday, after it warned of a hit from its investment in Vitamin Shoppe-owner Franchise Group.
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