Dow climbs higher as hopes grow for a bigger rate cut
The Dow and the broader stock market climbed higher at Friday’s open, driven higher once again by hopes of interest rate cuts by the Federal Reserve.
The Dow climbed 0.1%, or 27 points. The S&P 500 and the Nasdaq Composite rose 0.3% and 0.4%, respectively, at the opening bell.
Still, all three stock benchmarks are on track to finish the week a bit lower.
On Thursday, investors got excited about the possibility of a bigger-than-expected interest rate cut. New York Fed President John Williams on Thursday said policy makers should take preventative measures at the first signs of economic slowdowns. The market took this to mean that a bigger interest rate cut was on the way.
Expectations of a half-percentage-point cut at the Fed’s next meeting in two weeks more than doubled to 60% in response. Treasury yields and the US dollar slipped. But then a spokesperson clarified that Williams wasn’t making any predictions about the Fed’s monetary policy update due in two weeks. Expectations for a half-point cut retreated to 41% on Friday, although that was still more elevated than just two days ago.
In the latest attack on Fed policy, President Donald Trump tweeted that he preferred Williams first statement, calling it “100% correct that the Fed ‘raised’ far too fast and too early.”
Elsewhere, US oil prices are up 0.6% at $55.62 a barrel on Friday, as tensions between the United States and Iran are once again on the rise. President Donald Trump the USS Boxer downed an Iranian drone that came within 1,000 yards of the Navy ship.
