S&P 500 Achieves Record Closing High; Brief Decline Following Powell’s Remarks by Reuters

By Caroline Valetkevitch

NEW YORK – The stock market reached a record high close on Monday, rebounding after a temporary dip following comments from Federal Reserve Chair Jerome Powell, who indicated that the central bank is not rushing to implement additional interest rate cuts.

The Dow Jones Industrial Average also achieved an all-time closing high, with all three major U.S. stock indexes posting gains for both the quarter and the month.

Speaking at the National Association for Business Economics conference in Nashville, Tennessee, Powell suggested that, barring unexpected developments in the economy, he anticipates two more rate cuts this year, totaling 50 basis points.

"The majority of investors seem to believe that the Fed’s plans are fully accounted for in the current pricing for the remainder of the year. However, there may be more to the Fed’s 2024 outlook than we realize," stated Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Oklahoma. He added, "In fact, the soft landing could indeed occur."

Earlier this month, the Fed initiated a new easing cycle with a significant 50 basis point rate cut. Currently, traders are estimating a 35% likelihood of another 50 basis point reduction in November, a decrease from approximately 37% before Powell’s remarks and 53% the previous Friday, according to data from the CME Group.

The Dow rose 17.15 points, or 0.04%, to 42,330.15, while the S&P 500 climbed 24.31 points, or 0.42%, to 5,762.48. The Nasdaq Composite gained 69.58 points, or 0.38%, finishing at 18,189.17.

For September, the S&P 500 increased by 2%, marking its best performance for the month since 2013 and its fifth consecutive month of growth. In quarterly terms, the S&P 500 rose 5.5%, the Nasdaq advanced 2.6%, and the Dow climbed 8.2%.

Although the S&P 500 initially dipped after Powell’s speech, it recovered as the session progressed, possibly benefiting from quarter-end trading activities. "There’s a mix of momentum trading and typical window dressing happening at the end of the quarter, where investors tend to buy up the winners while offloading the underperformers," Dollarhide explained.

Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina, pointed out that the Federal Reserve will have access to additional economic data ahead of its November meeting, with crucial reports related to jobless claims and monthly payrolls expected this week.

CVS Health saw a 2.4% increase after reports indicated that hedge fund Glenview Capital Management plans to meet with top executives from the healthcare provider to discuss operational improvements.

On the NYSE, advancing shares outnumbered declining ones by a ratio of 1.06 to 1, while on Nasdaq, there was a 1.00 to 1 ratio in favor of advancing stocks.

The S&P 500 recorded 30 new 52-week highs and two new lows, while the Nasdaq Composite noted 82 new highs and 88 new lows. Total trading volume on U.S. exchanges reached 12.64 billion shares, surpassing the average of 11.93 billion shares over the last 20 trading days.