The S & P 500 hits the first intraday record since May, when the Fed abandons "patience"



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  • The S & P 500 index records the first intraday record since May 1
  • The Dow is trading at its highest level since its October 3 high
  • Gold rose 2.6% to $ 1,384.50 an ounce, hitting a 5-year high
  • Slack Technologies, a business software messaging company, is scheduled to be listed on the NYSE

US stock indexes extended gains for the fourth consecutive day, testing new records after the Federal Reserve signaled that policy easing may be needed to sustain the economy.

How are benchmarks working?

The Dow Jones Industrial Average

DJIA, + 0.75%

rose 232 points, or 0.9%, to 27,735, marking its highest level of trading since Oct. 3. The S & P 500

SPX, + 0.76%

gained 27 points, or 0.9%, at 2,953, trading above its closing record on April 30 at 2,945.83 and touching a new intraday peak at 2,956.20, surpassing the intraday record of May 1. Meanwhile, the Nasdaq Composite Index

COMP + 0.88%

rose 88 points, or 1.1%, trading about 1% from its May 3 close of 8,164.

What is driving the market?

On Wednesday, Fed Chairman Jerome Powell hinted strongly that the central bank would cut interest rates at 2.25% to 2.50% in the coming weeks if the economic outlook affected by trade tensions between US and China show no sign of improvement.

"The defense of a somewhat more accommodative policy has strengthened," Powell told a news conference on Wednesday to discuss the long awaited Federal Open Market Committee decision. Policymakers kept rates unchanged as expected but removed the word "patient" from their updated policy statement, suggesting that it is ready to act soon.

While markets are broadly anticipating that the Fed would respond to growing signs of stress in the economy, the central bank's stance on looser monetary policy was seen as a strong argument for continued stockpiling, despite concerns about economic lurks

The Fed remained optimistic about the outlook, but said inflationary pressures retreated, forcing it to lower its projection for PCE inflation in 2019 from 1.8 percent to 1.5 percent below the 2 percent target. At the same time, it left its gross domestic product estimate at 2.1%.

Curiously low inflation has often been cited by FOMC members as one of the main reasons for their doubts about their monetary policy trajectory. The Fed meets on July 30 and 31, while President Donald Trump is expected to speak with Chinese President Xi Jinping on the sidelines of the next meeting of the Group of 20 developed countries in Japan at the end of June. be achieved.

Watch: Recap of Fed's Decision and Powell Press Conference

The rhetoric of Central Bank policymakers around the world this week has helped raise commodity prices, particularly gold, with high expectations that interest rates, which could undermine the appetite for gold bullion, could be reduced.

Bank of Japan President Haruhiko Kuroda and the Bank of England joined the chorus of bankers, including Powell and European Central Bank President Mario Draghi, signaling a willingness to boost stimuli if global risks, at least partially stimulated by the trade, worsen.

BOJ's Kuroda said "we will consider expanding the stimulus without hesitation," he told a news conference, according to Reuters.

What data is in focus?

The Philadelphia Fed's manufacturing index in June fell to just 0.3 after posting a four-month high of 16.6 the previous month. Any reading above zero indicates conditions for improvement. Economists surveyed by MarketWatch were expecting a reading of 8.

Initial jobless claims, a difficult way to measure layoffs, fell between 6,000 and 216,000 in the seven days ending June 15, the government said on Thursday.

What are the strategists saying?

"The indices are expected to increase along with rising gold and oil prices. Rising geopolitical tensions continue to propel the race for security, while hopes for a rate cut dominate the stock markets, "said Peter Cardillo, chief market economist at Spartan Capital Securities.

"Powell Press Conference [on Wednesday] showed some reluctance, but it seems the markets are certain that the Fed will cut in July. If the data deterioration is worse than expected, calls for a 50% cut at the July meeting will grow in the coming weeks, "wrote Edward Moya, senior market analyst at Oanda on a daily research note.

Which stocks are in focus

Slack Technologies Inc.

WORKS, + 0.00%

is scheduled to make its debut on the New York Stock Exchange on an unusual direct listing of the enterprise software company. Here's what you should know.

How are the other assets being traded?

Before US markets open on Thursday, the Hong Kong Hang Seng Index

HSI + 1.23%

rose by 1.2% and China's Shanghai Composite Index

SHCOMP, + 2.38%

increased by 2.4%. Nikkei of Japan 225

NIK, + 0.60%

were up 0.6%, while in Europe Stoxx Europe 600

SXXP, + 0.58%

traded 0.6% above.

Gold Futures

GCQ19, + 2.71%

Meanwhile, it rose 2.6% to the highest level since 2013 at $ 1,384.50 an ounce, while the 10-year Treasury note

TMUBMUSD10Y, -1.62%

touched an income below 2%, and the US dollar, as measured by the ICE US Dollar Index

DXY, -0.47%

fell 0.5% to 96.67.

Crude oil prices

CLU19, + 4.90%

emerged amidst geopolitical tensions in the Middle East. Iran says it dropped a US plane into its airspace.

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