Global Markets Rally as Fed Signals Imminent Rate Cuts

Wall Street and global shares soared following U.S. Federal Reserve Chair Jerome Powell's announcement of imminent interest rate cuts. The Dow Jones and S&P 500 neared all-time highs, while Treasury yields and the dollar declined. Traders are now expecting a significant rate cut in September.

Wall Street and global shares soared on Friday, nearing all-time highs, as Treasury yields fell and the dollar weakened. U.S. Federal Reserve Chair Jerome Powell confirmed that the U.S. is on the brink of cutting interest rates.

During his speech at the annual economic symposium in Jackson Hole, Wyoming, Powell stated, "the time has come" to reduce interest rates. Powell highlighted that rising risks to the job market and an inflation rate near the Fed's 2% target necessitate the policy shift. Carl Ludwigson from Bel Air Investment Advisors commented that Powell's remarks provided sufficient assurance to the markets without instilling fear.

On Wall Street, the Dow Jones Industrial Average rose 1.14% to 41,175, the S&P 500 gained 1.15% to 5,634, and the Nasdaq Composite increased by 1.47% to 17,877. In Europe, the STOXX 600 index climbed 0.5%, reaching its highest level in over three weeks. While Asian shares outside Japan dipped slightly, Japan's Nikkei gained 0.4% amid local economic updates. Overall, MSCI's all-country world index increased by about 1.1%, with early August's market turmoil fading from investors' memories.

(With inputs from agencies.)