The Dow Jones Industrial Average rallied on Friday after New York Federal Reserve President John Williams hinted that the central bank may cut interest rates again this year.
The index of blue-chip shares increased by 493.15 points, or 1.08%, and closed at 46,245.41. The Nasdaq Composite rose 0.88% to end at 22,273.08, while the S&P 500 ended 0.98% higher at 6,602.99.
“I see monetary policy as being moderately restrictive, although somewhat less so than before our recent actions,” Williams said in a speech in Santiago, Chile. “Therefore, I still see room for further adjustment of the target range for the federal funds rate in the near term to bring the policy stance closer to the neutral rate range, thereby maintaining a balance between achieving our two objectives.”
Comments from a prominent Fed member like Williams signaled to investors that the central bank’s leadership is likely to cut its benchmark overnight interest rate at its upcoming meeting in December, SEEbiz reports. That prompted traders to increase bets that the Fed will actually cut interest rates next month for the third time in 2025.
Even with today’s gains, the three major indexes still posted big losses this week. The S&P 500 ended the week down about 2%, as did the 30-stock Dow Jones. The Nasdaq fell by 2.7% in that period.
Speaking of the recent pressure, Hatfield believes that “this is a normal, seasonal pullback in value after an earnings release,” adding that “a part of the market called bubbles is being destroyed.”
