The Dow Jones Industrial Average surged 846 points on Friday to close at an all-time high of 45,631.74, its first record high since December 4. The broader S&P 500 and Nasdaq Composite also gained ground, with the S&P posting its best day since May.
Federal Reserve Chair Jerome Powell’s speech at a central banking forum in Jackson Hole, Wyoming, sent markets into a rally mode as he hinted that interest rate cuts could be on the way. Powell stated that the baseline outlook and shifting balance of risks may warrant adjusting policy stance, but also emphasized the need to prevent downside risks to employment.
Investors are enthusiastic about the possibility of a Fed rate-cutting cycle next month, with traders pricing in an 83% chance of a cut in September. This has led to a rally in stocks, bonds, and other assets, with the CBOE Volatility Index sinking to its lowest level since November.
The Dow’s record high marks the completion of a remarkable recovery from its previous peak in December, which had dropped as much as 16% before clawing back those losses. The broader market has also been on the mend, with the S&P and Nasdaq hitting record highs just last month.
While uncertainty still looms over the weakening job market, stock investors are embracing optimism about robust corporate earnings and a potential rate-cutting cycle.
Source: https://edition.cnn.com/2025/08/22/investing/us-stock-market