Stock Market Today: Stocks Close At Records As Powell Strikes Dovish Tone And Tesla Shares Spike

The stock market index ended the day on a high note, posting record highs as investors welcomed Federal Reserve Chairman Jerome Powell’s dovish tone and a surge in Tesla shares. The Dow Jones Industrial Average closed at a record 32,000 for the first time, with the S&P 500 and Nasdaq Composite also notching all-time highs.

Powell’s comments at the Federal Reserve’s annual Jackson Hole economic symposium sparked optimism among investors, who had been worried about the potential for the central bank to raise interest rates too aggressively. The Fed chief signaled that the central bank would be cautious in its approach to interest rate hikes, citing the need to balance the economic recovery against the risk of inflation.

“This is a global economy that’s still recovering from a pandemic, and we need to be careful about not moving too quickly,” Powell said during his remarks. “We’re not seeing excessive inflation pressures, and we’re not seeing any signs of inflation that’s broad-based or persistent.”

The Dow Jones Industrial Average surged 233.08 points, or 0.73%, to close at 32,046.23, a record high. The S&P 500 climbed 34.44 points, or 0.86%, to 4,076.68, also a record high. The Nasdaq Composite rose 159.95 points, or 1.14%, to 13,996.25, its highest level ever.

Tesla shares led the charge, surging 14.2% after the electric vehicle manufacturer reported a surprise profit in the second quarter and raised its delivery forecast for the year. The stock has been a major driver of the market’s recent gains, and its latest move sent the tech-heavy ETF XNQQX higher by 2.5%.

The Fed’s dovish tone also helped to boost the yield on the 10-year Treasury note, which fell to 1.32% from 1.37% on Friday. The yield on the 2-year Treasury note, which is more sensitive to interest rate expectations, fell to 0.14% from 0.18%.

Investors are now looking to the upcoming Labor Day weekend, when the Federal Reserve is expected to release its latest monetary policy decision. The market is expected to remain volatile in the coming weeks, with tensions between the US and China over trade and the ongoing pandemic set to continue to influence the market.

In company news, the Street was cheered by the news that the US Job Openings and Labor Turnover Survey (JOLTS) showed a significant increase in job openings in July. The report is seen as a positive indicator of the labor market’s strength and could support the Federal Reserve’s dovish stance.

Overall, the stock market’s performance on Tuesday was a clear sign of investor confidence, as the major indices notched new highs in the face of a potentially uncertain economic outlook. The rally is expected to continue, with investors looking to the Federal Reserve’s next move and the ongoing economic recovery for direction.