Major equity indexes in the U.S. started the day in the positive territory and gathered further strength in the early trade boosted by renewed trade optimism and hopes of the Fed going for a rate cut to address the risks related to Trump administration’s trade policy and soft inflation. As of writing, the Dow Jones Industrial Average was up 1.15 on the day while the S&P 500 and the Nasdaq Composite were adding 1% and 1.1%, respectively.
While speaking at an event organized by the Federal Reserve Bank of Chicago, FOMC Chairman Powell said that they don’t know how or when the issues surrounding the trade conflict will be resolved and added that they will act as appropriate to sustain the economic expansion, hinting at the possibility of a rate cut. Earlier in the day, China’s Commerce Ministry said it was common to make revisions, suggestions, and adjustments during trade negotiations and reiterated that frictions between China and the U.S. should be resolved through dialogue and negotiations.
Among the 11-major S&P 500 sectors, the Financials Index is leading the rally by rising nearly 1.8% boosted by the strong rebound witnessed in the 10-year US T-bond yield. On the other hand, the defensive Real Estate and the Utilities indexes are posting losses to reflect the improved market sentiment.
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