US stocks gain as Fed signals it could soon cut rates

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NEW YORK: Wall Street stocks finished higher on Wednesday (Jun 19) after the Federal Reserve signalled it could soon cut interest rates due to ...

NEW YORK: Wall Street stocks finished higher on Wednesday after the Federal Reserve signalled it could soon cut interest rates due to uncertainty over the economic outlook., but Fed chief Jerome Powell said many central bankers feel the case for an interest rate cut has"strengthened," noting that trade frictions with China have dimmed the growth outlook.The broad-based S&P 500 gained 8.71 oints to 2,926.46, while the tech-rich Nasdaq Composite Index advanced 33.44 points to 7,987.

In its statement, the Fed said it"will act as appropriate to sustain the expansion" and dropped prior wording that it would be"patient" in assessing economic data, an omission that boosted expectations in futures markets that the Fed will cut interest rates in July. The more dovish statement followed up on a shift in tone from Powell on Jun 4. Over the ensuing period, the Dow has gained more than six per cent.Art Hogan, chief market strategist at National Securities, said the Fed's more dovish tilt was in line with expectations and largely priced in by financial markets.

The next big event will be the G20 meeting, which will provide a forum for US President Donald Trump and Chinese leader Xi Jinping to try to hash out a trade deal. "Where we are now is back to focusing on trade and putting monetary policy on the backburner," Hogan told AFP.

 

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