The US stock market reached record highs on Wednesday following Federal Reserve chairman Jerome Powell’s comments on inflation and interest rates. The tech-heavy Nasdaq Composite and broad-based S&P 500 both closed at all-time highs as investors reacted positively to Powell’s remarks.
Powell’s Inflation Comments
In his testimony before Congress, Powell acknowledged that inflation has been higher than expected but reiterated the Fed’s commitment to supporting economic growth while keeping prices stable. He emphasized that any actions taken by the central bank would be gradual and data-dependent.
“We will use our tools to ensure that higher inflation will be transitory,” Powell said during his testimony.
Nasdaq Hits Record High
The Nasdaq Composite index surged more than 1% on Wednesday to close above 14,000 for the first time ever. Tech stocks, which have been under pressure in recent weeks due to concerns about high valuations and rising bond yields, rebounded strongly as investors welcomed Powell’s reassurances.
S&P 500 Closes at All-Time High
The broader S&P 500 index also set a new record on Wednesday, closing above 4,100 for the first time. The index is now up more than 9% year-to-date despite a rocky start to the year amid uncertainty about the pace of economic recovery and potential tax increases under the Biden administration.