Dow surges nearly 300 points. Weak US manufacturing report boosts rate cut hopes

The Dow is up nearly 300 points after a poor manufacturing report.

A weak manufacturing report has given investors hope that the Fed will once again cut rates later this year. The Institute for Supply Management said US manufacturing activity was at its lowest level since August 2016.

The Dow rose as many as 263 points late Thursday morning. The S&P 500 was up 1%.

Stocks posted their worst day in two months Wednesday after Federal Reserve Chairman Jerome Powell said the Fed would not issue a series of rate cuts over the long term. But worsening US manufacturing may persuade Fed policymakers to cut rates again this year, which could boost companies’ bottom lines.

That’s why the market is reacting this way. The tech sector in particular was up strongly: The Nasdaq gained 1.4% Thursday.