Stocks rallied on Wall Street and major indexes ended November with their second straight month of gains after the head of the Federal Reserve said the central bank could soon ease up on its aggressive pace of interest rate hikes aimed at taming inflation. The S&P 500 rose 122.48 points, or 3.1%, to 4,080.11. The Dow Jones Industrial Average rose 737.24 points, or 2.2%, to 34,589.77. The Nasdaq rose 484.22 points, or 4.4%, to 11,468. The Russell 2000 index of smaller companies rose 50.03 points, or 2.7%, to 1,886.58. Treasury yields fell broadly and crude oil prices rose.
Powell, speaking at the Brookings Institution, reaffirmed that the central bank could begin moderating its pace of rate hikes as soon as December, when the policymaking committee is due to hold its next meeting, the AP reports. "We have a risk management balance to strike," Powell said. "And we think that slowing down (on rate hikes) at this point is a good way to balance the risks." While citing some recent signs that inflation is cooling, Powell stressed that the Fed will push rates higher than previously expected and keep them there for an extended period to ensure inflation comes down sufficiently. "History cautions strongly against prematurely loosening policy," Powell said. "We will stay the course until the job is done."
US crude oil prices climbed 3%. All of the company sectors in the benchmark S&P 500 rose, with technology and communication stocks powering much of the rally. Apple rose 4.9% and Netflix jumped 8.8%. Wall Street has been hoping that the Fed will slow the scale and pace of its interest rate hikes. The central bank has been very clear about its intent to raise interest rates until it is sure inflation is cooling. The Fed has raised its benchmark interest rate six times since March, driving it to a range of 3.75% to 4%, the highest in 15 years. The goal is to make borrowing more difficult and generally slow the economy in order to tame inflation. Powell said Wednesday the Fed may increase its key interest rate by a smaller increment at its December meeting, only a half-point, after four straight three-quarter point hikes.
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