The Dow prepared to mount an aggressive recovery on Friday after multiple Fed officials appeared to signal the need for an even larger interest rate cut than Wall Street already expects.
The index sped toward a substantial gain in the week’s closing session, even after the Fed clarified that at least one set of those remarks did not hint at a bold rate-slashing regime.
Dow Surges by 100 Points
All of Wall Street’s major indices advanced during the morning session. The Dow Jones Industrial Average surged by triple digits at the open. As of 9:34 am ET, the Dow had gained 98.74 points or 0.36% to climb to 27,321.71.
The Nasdaq jumped 34.43 points or 0.42% to 8,241.67, while the S&P 500 lagged its peers to rise 8.53 points or 0.28% to 3,003.64.
Fed Leaves Wall Street Awash in Dovish Commentary
The stock market traded higher following a bullish, if choppy, futures session.
Dow futures had surged overnight following a speech from New York Fed President John Williams that caused investors to speculate that the central bank could slash its interest rate target by 50 basis points at the upcoming FOMC meeting, rather than the consensus 25 basis point cut.
Speaking before the Central Bank Research Association, Williams said that central banks must “act quickly” during times of “economic distress.”
“It’s better to take preventative measures than to wait for disaster to unfold,” he said, than to “keep your powder dry.”
Almost concurrently, Fed Vice Chairman Richard Clarida appeared on the Fox Business Network, where he appeared to signal a rate cut in equally-dovish terms.