The Dow Jones Industrial Average hit a record intraday high on Thursday, topping 27,000 for the first time as investors cheered the increasing likelihood of the first rate cut in a decade.
Markets were buoyant as Federal Reserve Chairman Jerome Powell spoke for the second day on Capitol Hill as part of his twice-yearly testimony on monetary policy.
In Wednesday’s appearance before Congress, Powell signaled an openness to a rate cut, noting “crosscurrents” in the economy. That pushed all three major indices to new highs, on hopes a lower interest rate would boost lending and bolster economic growth, insulating the U.S. from a global slowdown.
The rally continued Thursday as Powell testified before the Senate Banking Committee, with the blue-chip Dow notching up a 132-point gain to hit 27,000 in early morning trading, before dipping slightly. The S&P 500 hovered around Wednesday’s record intraday high of 3,000.
Powell’s comments Thursday reinforced expectations for a rate cut, with the Chairman acknowledging that tariffs are “a distraction” that inject uncertainty into international supply chains.
“People like to know what the rules are,” he noted.
Market expectation for a rate cut remains at 100 percent, ahead of the Fed’s July 30-31 monetary policy meeting.