AP Photo/Richard Drew
- Stocks ended mostly higher on Thursday as the Dow Jones Industrial Average closed at a fresh high Thursday, a day after the Federal Reserve signaled that the US central bank would soon step in to keep the economy humming.
- The Dow Jones Industrial Average briefly topped 27,000 for the first time.
- Expectations for a cut held up even after government data showed a key measure of core inflation came in at its fastest pace in nearly a year and a half in June.
- Visit Markets Insider for more stories.
Stocks ended mostly higher on Thursday as the Dow Jones Industrial Average closed at a fresh high, a day after the Federal Reserve signaled the central bank would soon step in to keep the economy humming.
Fed Chairman Jay Powell signaled in a second day of congressional testimony that officials would slash interest rates at the end of the month, sending the Dow Jones Industrial Average above 27,000 for the first time.
Here’s a look at the numbers:
- The Dow Jones Industrial Average rose 0.85% to 27,088.08
- The Nasdaq Composite slipped 0.08% to 8,196.04
- The S&P 500 climbed 0.23% to 2,999.91
“It appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the US economic outlook,” Powell said, adding that the central bank would take actions to sustain the decade-long expansion.
His comments, along with minutes from the policy-setting Federal Open Market Committee on Wednesday, reassured investors who had seen a rate cut as less likely following a strong June jobs report last week. The central bank has dimmed its outlook for the economy this year on the back of slowing growth, below-target inflation, and trade tensions.
The probability of a half-percentage-point cut edged slightly higher on Thursday, according to CME Group, but most expected the central bank to lower its benchmark interest rate by 25 basis points. That was even as government data showed that a key measure of core inflation came in at its fastest pace in nearly a year and a half in June.
“To cut to the chase: the higher-than-expected print will not prevent the Fed from cutting rates in July,” said Eric Winograd, a senior economist at AllianceBernstein. “Inflation momentum remains limited—it will take a lot more than one month of firm price data to change the narrative around tepid price pressures.”
Healthcare and drug-distributor shares were in focus Thursday after the Trump administration withdrew a plan that would have limited annual prescription drug rebates under Medicare. Within the S&P 500, these were the largest gainers:
- Cigna Corp (+9.22%)
- Anthem (+5.55%)
- UnitedHealth Group (+5.53%)
And the largest decliners:
- Iron Mountain (-7.48%)
- Merck & Co Inc (-4.50%)
- Eli Lilly and Co (-4.09%)
The yield on the 10-year rose to 2.129%, and the short-term two-year yield climbed to 1.852%.
On the commodities front, oil prices were mixed as traders weighed an expected storm in the Gulf of Mexico against expectations for weaker demand. Lower-than-expected inventory in the US and Iran tensions have also supported prices in recent days.