Wall Street ended higher on Friday, with all three major U.S. stock indexes closing at record highs after Federal Reserve Chair Jerome Powell suggested the central bank could soon cut interest rates.
His remarks, delivered at the annual Jackson Hole Symposium, fueled a surge of optimism across equities and lifted indexes to new milestones. They also come after months of pressure from President Donald Trump to lower rates.
Powell signaled that policymakers are weighing a rate reduction as soon as the Fed’s next meeting, scheduled for September 16–17, though he stressed the move would depend on upcoming economic data. Inflation and labor market reports due in the coming weeks will be critical in shaping the decision, Newsmax reported.
“Powell did what central bankers do best at Jackson Hole — he kept the door open,” said Nigel Green, chief executive of deVere Group. “A cut in September would reassure households and businesses that the central bank is not asleep at the wheel. Delaying only raises the odds of a harder landing.”
Traders quickly raised their bets that the Fed would cut rates next month, with futures markets now pricing in nearly a 90% chance of a reduction, compared with about 75% before Powell’s comments.
According to preliminary closing data, the S&P 500 gained 96.73 points, or 1.52%, to 6,466.55. The Nasdaq Composite added 396.22 points, or 1.88%, to finish at 21,496.54. The Dow Jones Industrial Average surged 841.14 points, or 1.88%, to 45,626.64 — its first record close of the year.
All but one of the S&P 500’s 11 sectors advanced, with consumer discretionary stocks leading gains. Semiconductor shares climbed sharply, with the Philadelphia Semiconductor Index jumping, while megacap technology names also rallied. Tesla paced the advance among large growth companies.
The Russell 2000 Index, which is heavily influenced by interest-rate expectations, surged to its highest level of 2025, underscoring the rally’s broad base.
In July, Trump called for Powell to step down after the head of Fannie Mae and Freddie Mac demanded Congress launch an investigation into Powell’s recent testimony to lawmakers.
“‘Too Late’ should resign immediately!!!” Trump wrote on Truth Social, using his nickname for Powell.
Trump also linked to a Bloomberg report that laid out the accusations made by Federal Housing Finance Agency Director Bill Pulte, who claims Powell lied under oath during a Senate Banking Committee hearing last week.
Pulte said Powell misled lawmakers when questioned about the Fed’s controversial $2.5 billion renovation plan for its Washington, D.C., headquarters, Politico reported.
When asked by senators, Powell said the more extreme renovation items were part of older plans that had already been dropped. He insisted that other expenses, like fixing elevators to board members’ offices and replacing marble fixtures, were simply part of maintaining the existing structure.
Pulte didn’t buy it.
He accused Powell of delivering “deceptive” testimony and said the Fed chair gave answers that rise to the level of being fired for cause.
“This is nothing short of malfeasance and is worthy of ‘for cause’ removal,” Pulte said in a statement on X. “Chairman Powell needs to be investigated by Congress immediately.”
Pulte, who has repeatedly warned that the Fed’s high interest rates are crushing the housing market, is also demanding an inquiry into what he called Powell’s “political bias.” He claims Powell deliberately downplayed the scope of the Fed’s renovation project, which Powell had previously described as a “serious” and much-needed overhaul of the nearly 100-year-old facility.
In April, Trump stepped up his criticism of Federal Reserve Chair Jerome Powell, calling for his “termination” for not dropping interest rates rapidly enough.
His remarks came one day after the central bank governor issued a harsh warning about the impact of Trump’s sweeping tariffs on the economy.