It was the fourth record closing high in five sessions for the S&P, and the fifth in six sessions for the Nasdaq, runs only interrupted by jitters ahead of Fed Chair Jerome Powell’s Jackson Hole speech.
Ultimately, these worries were unfounded as Powell said on Friday the central bank would continue to be cautious in its approach to tapering its massive pandemic-era stimulus, while reaffirming a steady economic recovery.
“It’s now clear that there’s going to still be an extraordinary amount of support for this economy, probably until November,” said Ed Moya, senior market analyst for the Americas at Oanda.
“Some investors are thinking that tapering might not even start this year, but the one thing that everyone can agree on is that Chair Powell has signaled they are in no rush to raise interest rates and he’s disconnected tapering with rate-hike timing.”
With this in mind, investors turned to high-growth tech stocks which tend to benefit from expectations of lower rates because their value rests heavily on future earnings.
Apple jumped 3 percent to an all-time high, while Microsoft, Amazon.com and Google-owner Alphabet rose between 0.4 percent and 2.1 percent, helping the tech-heavy Nasdaq outperform the S&P 500 and the Dow.
The benchmark index is tracking its longest monthly winning streak since 2018 on the promise of easy money, with investors shrugging off signs of a slowing economic recovery and surging Covid-19 cases.
The S&P 500 gained 0.43 percent to 4,529 and the Nasdaq Composite added 0.9 percent, to 15,266. The Dow Jones Industrial Average fell 0.16 percent, to 35,400. (Reuters)