S&P 500, Nasdaq notch records | Fed’s Powell soothes markets | How to play the bond taper

FRI, AUG 27, 2021

EVENING BRIEF

AS OF FRI, AUG 27, 2021 • 05:00 ET

DJIA		35455.80
		+0.69%	+242.68

S&P 500		4509.37
		+0.88%	+39.37

NASDAQ		15129.50
		+1.23%	+183.69

Most Active

DOW
NAME	LAST	CHG	%CHG
AAPL	148.60	+1.06	+0.72%
MSFT	299.72	+0.63	+0.21%
INTC	53.89	+0.76	+1.43%

S&P 500
NAME	LAST	CHG	%CHG
AMD	111.40	+4.13	+3.85%
F	13.31	+0.41	+3.18%
AAPL	148.60	+1.06	+0.72%

NASDAQ
NAME	LAST	CHG	%CHG
AMD	111.40	+4.13	+3.85%
AAPL	148.60	+1.06	+0.72%
PTON	104.34	-9.75	-8.55%

EDITOR'S NOTE

Investors breathed a sigh of relief after Federal Reserve Chair Jerome Powell signaled bond tapering could start this year, but the central bank is in no rush to raise interest rates.

The Fed chief said inflation is solidly around the central bank's 2% target rate, one of the goals of the Fed's dual mandate, but it has "much ground to cover" to reach its other goal of maximum employment. He made clear that rate hikes would not immediately follow.

The S&P 500 and the Nasdaq Composite hit all-time highs after Powell's speech and closed at record levels. The Dow Jones Industrial Average gained 242.68 points to close at 35,455.80.

"Powell spends the bulk of the speech pushing back on inflation concerns, suggesting the Fed is not nearly as nervous about prices as some in the market (and Washington) are," said Adam Crisafulli, founder of Vital Knowledge. "Powell pushes back on rate liftoff worries, telling markets that the threshold for rate hikes is much higher than tapering."

The Fed chairman also devoted an extensive passage in the speech to explaining why he continues to think the current inflation rise is transitory and will eventually drop to the target level.

Based on statements from other Fed officials, a tapering announcement could come as soon as the Fed's Sept. 21-22 meeting.

With Jackson Hole behind us, investors are now shifting their focus on August's jobs report. Economists polled by Dow Jones expect 750,000 jobs were created in August and the unemployment rate fell to 5.2%.