US stocks soar as Powell indicates rate cut, says he will keep labor market strong

Here is the state of play after Powell’s speech at Jackson Hole in equity markets:

• S&P 500 up 1.3%
• Nasdaq Comp up 1.8%
• Russell 2000 up 2.2%
• DJIA +1.0%

There is some resistance in the S&P 500 right now as it challenges yesterday’s opening high. If that doesn’t crack, then watch out for profit taking despite a dovish speech.

You can argue that markets did sniff out much of this with gains in 9 of 11 days leading up to the speech. That said, there is going to be more dip buying with a Fed put in place.

Fed pricing is now 32% for 50 bps from 25% prior to the speech.

This article was written by Adam Button at www.forexlive.com.