Nasdaq, S&P, Dow ended higher after Powell addressed Wall Street
Wall Street's major indices closed higher as Fed Chairman Jerome Powell indicated that the Federal Reserve's policy rate is not on a preset course. The Nasdaq rose 0.3%, S&P 500 gained 0.4%, while the Dow closed nearly flat. Nine of the 11 S&P sectors advanced, with Energy and Communication Services leading. Treasury yields increased, with the 2-Year at 3.64% and the 10-Year at 3.79%. Powell emphasized a flexible approach to policy, while Atlanta Fed President Bostic hinted at a potential 50bp rate cut in November. Economic indicators showed mixed results, with Chicago PMI at 46.6 and Dallas Fed Manufacturing Survey at -9.0.
The financial community watched Wall Street's major market averages close out the month of September on a high note, as Fed Chairman Jerome Powell stated that the Federal Reserve's policy rate is not on a preset course as it moves towards neutral.
At the end of trading, the tech focused Nasdaq Composite (COMP:IND) finished higher by 0.3%, the benchmark S&P 500 (SP500) rounded out the day on top by 0.4%, and the blue-chip focused Dow (DJI) closed near even.
On a sector-by-sector stance, nine of the 11 S&P segments were able to make gains. The two segments that were able to advance the highest were Energy and Communication Services, while Materials suffered the most.
Moreover, the Treasury market observed an uptick in yields on Monday. The shorter end U.S. 2 Year Treasury yield (US2Y) advanced 8 basis points to 3.64%. At the same time, the longer end U.S. 10 Year Treasury yield (US10Y) moved up by 3 basis points to 3.79%. See how other yields trade across the entire yield curve here.
On the Federal Reserve front, chairman Jerome Powell said: "If the economy evolves broadly as expected, policy will move over time toward a more neutral stance," on Monday at the National Association for Business Economics annual meeting. "But we are not on any preset course."
Also, Atlanta Fed President Raphael Bostic, in a Reuters interview published Monday, signaled his willingness for 50bp rate cut in November based on upcoming labor-market data. "A surprise to the weak side .... would pull me much further into really needing another dramatic move," Bostic said.
Shifting to the economic calendar and investors will have seen that the September Chicago PMI edged up, but stayed in contraction territory. PMI rose to 46.6 compared to the forecasted 46.1 level.
Furthermore, the Dallas Fed Manufacturing Survey increased to -9.0 in September from -9.7 in August, though falling short of the -4.5 forecasted figure.
As for stocks that were on the move, shares of EV maker NIO (NIO) rallied 2.4% amid growing enthusiasm in China over Beijing's latest stimulus measures.
CVS Health (CVS) rose 2.3% following a report that hedge fund Glenview Capital Management is set to meet with top executives to propose operational improvements.