S&P 500 Nears All-Time High After Fed Signals Rate Cut

All three major U.S. stock indexes surged more than 1% on Friday. The S&P 500 neared a record high amid optimism for interest rate cuts after Fed Chair Jerome Powell's dovish comments. The market responded positively to potential policy easing and strong economic data.

All three major U.S. stock indexes surged more than 1% on Friday, with the benchmark S&P 500 nearing an all-time high. This bullish sentiment followed Federal Reserve Chair Jerome Powell's announcement of imminent interest rate cuts at a prestigious economic conference in Jackson Hole.

Minutes from the Fed's July meeting indicated several policymakers were prepared to cut rates in September. "Powell is really data driven. The unemployment is not alarming but it's certainly higher than it has been in the past and that would be something for him to take action on," stated Kim Forrest, chief investment officer at Bokeh Capital Partners.

Traders have fully priced in a rate cut at the Fed's upcoming meeting, with a 65.5% likelihood of a 25 basis point reduction. Positive comments from Fed officials and gradual economic slowing have allowed U.S. stocks to bounce back from an earlier dip. By mid-morning, the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite had all posted significant gains.

(With inputs from agencies.)