Market Snapshot: S&P 500, Dow at new intraday highs as bulls bank on Fed rate cut

U.S. stocks were higher midday Friday, pushing further into record territory, after Federal Reserve Chairman Jerome Powell in two days of congressional testimony this week bolstered investor expectations for an interest-rate cut at the end of the month.

How are the major benchmarks performing?

The Dow Jones Industrial Average DJIA, +0.52%  rose 133 points, or 0.5%, to 27,222, while the S&P 500 SPX, +0.18%  gained 6 points, or 0.2%, to 3,006. The Nasdaq Composite index COMP, +0.37% was 29 points higher at 8,225, a gain of 0.4%.

The Dow hit a new intraday high of 27,248.71, while the S&P set a new intraday record of 3,006.90.

The Dow on Thursday rose 227.88 points, or 0.8%, to 27,088.08, marking its first close above 27,000. The S&P 500  also pushed back into record territory, advancing 6.84 points, or 0.2%, to end at 2,999.91. The Nasdaq Composite, which scored a record close on Wednesday, pulled back, ending 6.49 points lower Thursday at 8,196.04, a loss of 0.1%.

Read: The Dow components that drove the blue-chip stock index to 27,000

What’s driving the market?

Powell, in Thursday testimony before the Senate Banking Committee, said the U.S. economy is in a “very good place” but had only partly recovered from a “confidence shock” it suffered in May due to the U.S.- China trade war. Powell’s comments on Thursday, and his appearance before a House panel on Wednesday, were seen affirming expectations the Fed will move at its July 30-31 meeting to cut its fed-funds rate by at least a quarter point and to potentially deliver further cuts before year-end.

Powell’s “downbeat tone when reflecting on the economic outlook and inflation combined with his complete lack of desire to correct market expectations, despite a cut being 100% priced in this month, gave investors exactly what they wanted,” said Craig Erlam, senior market analyst at Oanda, in a note.

Charles Evans, President of the Chicago Federal Reserve and voting member of the central bank’s interest-rate setting committee, echoed these sentiments in a speech Friday, when he said that he is “nervous about inflation,” saying that “a couple” of cuts may be needed to help lift inflation above 2%, according to Bloomberg.

See: An economy gone ‘mad’? The Fed is going to cut interest rates despite record stock prices, low unemployment

Trade data from China, meanwhile, showed the country’s exports fell last month as external demand softened, while imports showed an even more substantial drop. News reports also noted a widening of China’s trade surplus with the U.S. to $29.92 billion from $26.9 billion in May.

In the eurozone, factory output rose sharply in May, which economists said may be a sign the region’s manufacturing sector is stabilizing after a long slowdown.

U.S. wholesale prices rose 0.1% in June, versus expectations of a 0.1% decline, according to a MarketWatch poll of economists. Year-over-year, wholesale prices rose 2.1% in June, down from 2.3% in May.

The U.S. corporate earnings reporting season gets under way in earnest next week, with a slew of big banks set to kick off the festivities.

See: Banks should shine among S&P 500 stocks this earnings seaso n

Which stocks are in focus?

Shares of Facebook Inc. FB, +0.29%   are in focus after President Trump criticized the company’s planned virtual currency project, Libra, on Twitter Thursday evening, stating that the currency will have “little standing or dependability,” and suggesting the social media company would need to seek a banking charter to launch a currency. Shares in the social media giant rose 0.1% Friday.

Shares of Snap Inc. SNAP, +1.41%   and Stitch Fix Inc. SFIX, +1.56%   are rallying after Goldman Sachs analyst Heath Terry upgraded both stocks from “neutral” to “buy”. Snap shares rose 1.3% Friday, while Stich Fix stock advanced 1.4%.

Illumina Inc. ILMN, -15.35%   updated its second-quarter guidance Thursday after the close, saying it expects revenue to be $50 million lower than previously thought and below analyst forecasts. Shares in the genetics company slumped 14.9% Friday.

Shares of Milacron Holdings Corp. MCRN, +24.06% surged 24.5%, after the plastics manufacturer and Hillenbrand Inc. HI, -11.75%   announced that Hillenbrand would acquire the firm in a $2 billion cash and stock deal, which valued Milacron at a 33.5% premium to Thursday’s closing price.

Accenture PLC ACN, -0.13%   said late Thursday that its board had named Julie Sweet the company’s new chief executive officer, and that David Rowland, interim chief executive officer, has been appointed executive chairman. The stock fell 0.1%

How are other markets trading?

The yield on the 10-year Treasury note TMUBMUSD10Y, -0.70%   was rising for the fourth straight day, up 1 basis point to 2.127%.

In Asia, stocks closed higher Wednesday, with the China CSI 300  000300, +0.62%   adding 0.6%, Japan’s Nikkei 225 NIK, +0.20%   rising 0.2% and Hong Kong’s Hang Seng Index HSI, +0.14%   advancing 0.1%. European shares were marginally higher, with the Stoxx Europe 600 SXXP, +0.04% adding less that 0.1%.

In commodities markets, crude oil prices CLQ19, +0.60%  were edging higher, along with gold prices GCQ19, +0.32% The U.S. dollar DXY, -0.16%  was trading 0.1% lower.

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