The S&P 500 surges above 3,000, stocks hit record highs after the Fed reaffirms a rate cut is coming

AP Photo/Mark Lennihan

• Stocks hit fresh intraday highs in early trading on Wednesday as remarks by the Federal Reserve Chairman Jay Powell bolstered Wall Street's expectations for lower interest rates at the end of the month.
• "Since our May meeting, however, these crosscurrents have reemerged, creating greater uncertainty," Powell said in prepared congressional testimony.
• His comments reassured investors whose hopes for an adjustment fell after the June jobs report out last week showed that hiring rebounded more than expected.
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Stocks hit fresh intraday highs in early trading on Wednesday as remarks by the Federal Reserve chief bolstered Wall Street's expectations for lower interest rates at the end of the month.

Fed Chairman Jay Powell signaled in prepared congressional testimony that the central bank would slash interest rates at the end of a two-day policy meeting that ends July 31, sending both the S&P 500 and the Nasdaq Composite to record levels. The central bank has dimmed its outlook this year on the back of slowing growth, below-target inflation and ongoing trade tensions.

Here's a look at the numbers:

• The S&P 500 rose 0.72% to 3,000.97
• The Nasdaq Composite jumped 0.90% to 8,214.90
• The Dow Jones Industrial Average climbed 0.62% to 26,950.05

"At the time of our May meeting, we were mindful of the ongoing crosscurrents from global growth and trade, but there was tentative evidence that these crosscurrents were moderating," Powell said. "Since our May meeting, however, these crosscurrents have reemerged, creating greater uncertainty."

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His comments reassured investors whose hopes for an aggressive adjustment fell after the June jobs report out last week showed that hiring rebounded more than expected. The probability of a half-percentage point cut edged slightly higher on Tuesday, according to CME Group, but most expected the central bank to lower its benchmark interest rate by 25 basis points.

Yields on the 10-year Treasury note rose to 2.061% early Wednesday, while the short-term 2-year yield fell to 1.858%.

Within the S&P 500, these were the largest gainers:

• Micron Technology (+5.76%)
• Apache Corp (+3.49%)
• Western Digital (+3.22%)

And the largest decliners:

• Mylon (-4.33%)
• Unum (-3.13%)
• W W Grainger (-2.28%)

On the commodities front, oil prices rose more than 2% after the US reported a larger inventory drawdown than expected and Iran tensions continued. West Texas Intermediate rose to $59.57 a barrel, while Brent traded just under $66.

Powell began testimony at 10 a.m. ET. Minutes from the Federal Open Market Committee meeting are scheduled to be released at 2 p.m. ET. The next monetary policy announcement is set for July 31.

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