Stock market today: Wall Street rallies toward records after Fed says 'time has come' for rate cuts

NEW YORK — U.S. stocks rallied closer to their records after the head of the Federal Reserve finally said out loud what Wall Street has been expecting for a while: Cuts to interest rates are coming soon to help the economy. The S&P 500 rose 1.1% Friday after Fed Chair Jerome Powell said the time has come to lower its main interest rate from a two-decade high. The index is back within 0.6% of its all-time high set last month. The Dow Jones Industrial Average climbed 1.

Powell's speech marked a sharp turnaround for the Fed after it began hiking rates two years ago as inflation spiraled to its worst levels in generations. The Fed's goal was to make it so expensive for U.S. households and companies to borrow that it slowed the economy and stifled inflation. But that second part of his statement held back some of the details that Wall Street wanted so much to hear.

If their predictions are wrong, which has also been a frequent occurrence, that could mean Treasury yields have already pulled back too much since their decline began in the spring. That in turn could pressure all kinds of investments. On Thursday, for example, the S&P 500 fell to its worst loss in more than two weeks after Treasury yields climbed.

Its stock has been shaky this summer amid worries that investors took it and other highly influential Big Tech stocks too high in their mania around artificial-intelligence technology. But Nvidia has been charging back recently ahead of its highly anticipated profit report scheduled for next week. Workday jumped 12.5% after delivering better profit and revenue than forecast. The company, which helps businesses manage their people and money, also raised its forecast for a measure of profitability this year.

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