Indexes rise in volatile trade as investors mull Powell speech

By Caroline Valetkevitch

NEW YORK (Reuters) – U.S. stocks were moderately higher in volatile afternoon trading on Friday as investors digested comments from Federal Reserve Chair Jerome Powell that the U.S. central bank may need to raise interest rates further to ensure inflation is contained.

Trading has been jumpy since his much-anticipated speech at the Economic Policy Symposium at Jackson Hole, Wyoming. Powell also acknowledged that price pressures have eased.

“He is demonstrating that he is pleased with how far monetary policy has come and how inflation has been reduced. But he is still holding on tightly to this notion that they are watching it carefully and they still have work to do,” said Michael Arone, chief investment strategist at State Street (NYSE:) Global Advisors in Boston.

The Fed has been raising rates since March 2022 in an effort to bring down inflation.

Following Powell’s comments, expectations of a rate hike in November rose from a day earlier, according to CME Group’s (NASDAQ:) FedWatch tool. Most traders still expect the Fed to hold off from hiking in September.

Most sectors were higher, led by gains in energy, which was up 1.5% along with gains in oil prices, while technology was up 0.7%.

The rose 302.35 points, or 0.89%, to 34,401.77, the S&P 500 gained 33.85 points, or 0.77%, to 4,410.16 and the added 121.76 points, or 0.9%, to 13,585.73.

The S&P 500 and Nasdaq were set to end higher for the week, with the market gaining in the run up to Nvidia (NASDAQ:)’s second-quarter results, which the company released after the bell on Wednesday.

Retailers were mixed following recent results. Gap rose 7.2% after the company beat second-quarter profit estimates, while Nordstrom (NYSE:) was down 7.1% after the department store chain left its forecasts unchanged. Shares of Marvell (NASDAQ:) Technology fell 5.6% after the chipmaker posted a fall in second-quarter revenue. Hawaiian Electric, which has come under scrutiny over its possible role in the Hawaii wildfires, dropped 19% after the county of Maui sued the power company.

Advancing issues outnumbered declining ones on the NYSE by a 1.77-to-1 ratio; on Nasdaq, a 1.34-to-1 ratio favored advancers.

The S&P 500 posted six new 52-week highs and seven new lows; the Nasdaq Composite recorded 19 new highs and 179 new lows.