Dow tops 27,000 for first time after Powell signals rate cut
The Dow Jones Industrial Average topped 27,000 for the first time on Thursday as the top three equity benchmarks traded higher on Wall Street after Federal Reserve Chairman Jerome Powell signaled the central bank was still moving towards an interest rate cut due to trade uncertainties.
Following several days of uneven trading activity over concerns that the Federal Reserve would withhold moving forward on the expected cuts, investors were optimistic after Powell’s remarks that the central bank’s outlook for the U.S. economy is weighed down by trade tensions.
Many Federal Open Markets Committee participants “saw that the case for a somewhat more accommodative monetary policy had strengthened,” he said in prepared testimony for the House Financial Services Committee.
Powell is back on Capitol Hill for a second round of testimony, this time before the Senate.
|I:DJI||DOW JONES AVERAGES||27033.54||+173.34||+0.65%|
|I:COMP||NASDAQ COMPOSITE INDEX||8210.470975||+7.94||+0.10%|
Powell also said a strong June jobs report did not change the central bank’s economic outlook or policy on interest rates. He is scheduled to testify in front of a Senate panel on Thursday.
In economic news, initial claims for state unemployment benefits declined 13,000 to a seasonally adjusted 209,000 for the week ended July 6, the lowest level since April, the Labor Department said.
Shares of technology companies reacted after the French government on Thursday approved a new tax on those firms amid a probe into the measure by the U.S. government. The 3 percent tax on companies with roughly $845 million in global revenue and $281 million in digital sales in France will take effect retroactively to the start of 2019.
Meanwhile, investors are eagerly awaiting a July 31 policy meeting to see if the Federal Reserve moves forward with the rate cuts.
Shares of Delta Air Lines surged on better-than-expected results for the second quarter. Profits at the Atlanta-based carrier rose 32 percent to $2.35 per share, as revenue grew to $12.5 billion.
Shares of UnitedHealth Group surged along with other pharmacy benefit managers after President Trump abandoned a proposal that would have overhauled the rebates that are collected.
|DAL||DELTA AIR LINES INC.||60.51||+1.04||+1.75%|
|UNH||UNITEDHEALTH GROUP INCORPORATED||260.89||+13.41||+5.42%|
|MRK||MERCK & CO. INC.||80.91||-3.91||-4.61%|
Last month, President Trump and Chinese President Xi Jinping agreed to relaunch trade talks after negotiations fell apart in May.
Top White House officials had “constructive” talks with Chinese Vice Premier Liu He and Minister Zhong Shan earlier this week and a face-to-face meeting is possible.