Stocks, Bonds Jump As Powell Signals Fed Will Cut: Markets Wrap

A decisive move toward dovishness by Federal Reserve Chair Jerome Powell all but cemented bets on an imminent interest rate cut and drove stocks and bond prices sharply higher at the end of a volatile week.

The S&P 500 rose 1.2%, halting a five-day slide, with a rebound in tech megacaps propping up the market. Treasury 10-year yields slid six basis points to 4.27%. Money markets increased bets on policy easing in September. The dollar fell.

Powell carefully opened the door to an interest-rate cut in September, pointing to rising risks for the labor market even as worries over inflation remain.

“The stability of the unemployment rate and other labor market measures allows us to proceed carefully as we consider changes to our policy stance,” Powell said in remarks prepared for the Fed’s annual conference in Jackson Hole, Wyoming on Friday. “Nonetheless, with policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance.”

• Nvidia Corp. has instructed component suppliers including Samsung Electronics Co. and Amkor Technology Inc. to stop production related to the H20 AI chip, the Information reported, citing unidentified sources.

• Meta Platforms Inc. has agreed to a deal worth at least $10 billion with Alphabet Inc.’s Google for cloud computing services, according to people familiar with the matter, part of the social media giant’s spending spree on artificial intelligence.

  • Meta Platforms Inc. is hiring another key Apple Inc. artificial intelligence executive, even as the social networking company prepares to slow its recruitment, according to people familiar with the matter.

• Zoom Communications Inc. gave a stronger-than-expected annual outlook for sales growth, and raised its fiscal-year forecast, suggesting customers are buying more of the company’s expanded line of software products.

• BJ’s Wholesale Club Holdings Inc. boosted its adjusted earnings per share forecast for the full year.

• Discount-retailer Ross Stores Inc. estimated inflation will push more consumers to seek its off-price wares and deliver sales growth above expectations.

• Cenovus Energy Inc. agreed to buy MEG Energy Corp. for C$6.93 billion ($5 billion), beating a bid from Strathcona Resources Ltd. to boost its position among Canada’s top oil producers.

• The US Department of Justice has rejected claims by two whistleblowers that it failed to properly investigate allegations of sanctions violations by Standard Chartered Plc, the bank said.

• China Vanke Co. reported a wider first-half loss, underscoring the developer’s ongoing challenges even after it received a financial lifeline from its hometown government in Shenzhen.

Stocks

• The S&P 500 rose 1.2% as of 10:05 a.m. New York time

• The Nasdaq 100 rose 1.2%

• The Dow Jones Industrial Average rose 1.5%

• The Stoxx Europe 600 rose 0.6%

• The MSCI World Index rose 1.2%

• Bloomberg Magnificent 7 Total Return Index rose 1.3%

• The Russell 2000 Index rose 2.1%

Currencies

• The Bloomberg Dollar Spot Index fell 0.5%

• The euro rose 0.5% to $1.1661

• The British pound rose 0.5% to $1.3479

• The Japanese yen rose 0.5% to 147.68 per dollar

Cryptocurrencies

• Bitcoin rose 1.6% to $114,218.87

• Ether rose 4.6% to $4,435.9

Bonds

• The yield on 10-year Treasuries declined six basis points to 4.27%

• Germany’s 10-year yield declined three basis points to 2.73%

• Britain’s 10-year yield declined one basis point to 4.72%

• The yield on 2-year Treasuries declined eight basis points to 3.71%

• The yield on 30-year Treasuries declined four basis points to 4.88%

Commodities

• West Texas Intermediate crude rose 0.5% to $63.84 a barrel

• Spot gold rose 0.3% to $3,348.14 an ounce=