The S&P 500 reached a new record high Wednesday afternoon, surpassing 5,600 for the first time. Federal Reserve Chair Jerome Powell reiterated that the Fed is increasingly focused on the slowing job market, not just on controlling inflation.
“We’re not just an inflation-targeting central bank,” said Powell. “We also have an employment mandate.”
Powell was speaking on the second day before the U.S. House Financial Services Committee as part of his semiannual address to Congress on monetary policy.
Investors are speculating that this may mean that the Fed is likely to start reducing interest rates soon. AI and chip stocks surged on Wednesday. Nvidia rose over 3%, while Micron Technology and ON Semiconductor each gained over 3%.
Following his statement, the S&P 500 hit another high, reaching 5,613 points with a 0.6% jump on Wednesday afternoon. The Dow Jones Industrial Average increased 0.5% to 39,500 points, while the tech-heavy Nasdaq rose 0.8% to 18,588 points.
During his testimony before the Senate Banking Committee on Tuesday, Powell emphasized that officials have been closely monitoring inflation, and decisions will be made on a meeting-by-meeting basis.
The Federal Reserve chair appeared confident with the reduction in inflation and improvement in the job market. However, he stressed that the 2% inflation rate target remains, but further decisions will require additional data.
Powell’s address to Congress about monetary policy has drawn attention to the upcoming inflation data, which is scheduled for release on Thursday. Investors are eagerly awaiting the data, as it will influence the Fed’s decisions regarding the timing and extent of potential interest rate cuts.