Wall Street pushed higher into record territory Friday after Federal Reserve chief Jerome Powell all but flicked the switch on a US interest rate cut at the end of the month.
After big losses at the start of the week, trading floors have been much more upbeat since a two-day congressional testimony in which Powell hinted at a possible reduction in borrowing costs, with markets now betting on the size of the anticipated cut.
After the Dow stocks index pushed above 27,000 points for the first time on Thursday, it pushed further into record territory on Friday, as did the broader S&P 500. The tech-heavy Nasdaq stayed close to record highs.
“Dealers remain divided as to the size of the (Fed) cut… but the view across the board is that monetary policy will be loosened,” said analyst David Madden at CMC Markets UK.
While the positive sentiment initially filtered through to Asia and Europe on Friday, the momentum petered out in late European trading.
For Chris Beauchamp, chief market analyst at online trading firm IG, “the question is now whether equities can survive an earnings season that at present is forecast to show the second quarter of declines in earnings.”
Further stock market gains came despite unease caused by US President Donald Trump accusing China of backsliding on a trade promise - just days after the two sides tentatively began telephone talks on resolving their tariffs war.