Market Averages Turned Higher and Investors Debated Rate Hike Prospects After Powell Speech

Barry Adams
25 Aug, 2023
New York City

Stocks advanced on Friday and market indexes are likely to halt a three-week slide on the sustained gains in tech stocks. 

Investors looked ahead to Federal Reserve Chair Jerome Powell's speech at 10:00 a.m. ET and hoped to gain insights into the U.S. economy. 

Federal Reserve policymakers have perfected the craft of double-speak and "data-dependent" policy that has so far failed to bring down inflation to the target level of 2%.  

Investors have been divided but more are convinced that the Federal Reserve is more likely to lift rates  in the coming months and rates are likely to stay higher for longer this year and the next. 

The economy's vigor was confirmed by Chairman Powell in his speech.

“So far this year, GDP (gross domestic product) growth has come in above expectations and above its longer-run trend, and recent readings on consumer spending have been especially robust,” noted Powell. 

“In addition, after decelerating sharply over the past 18 months, the housing sector is showing signs of picking back up. 

Additional evidence of persistently above-trend growth could put further progress on inflation at risk and could warrant further tightening of monetary policy."

 

U.S. Indexes & Yields 

The S&P 500 index traded up 0.2% to 4,385.33 and the Nasdaq Composite gained 0.1% to 13,476.38.  

The yield on 2-year Treasury notes increased to 5.02%, 10-year Treasury notes inched higher to 4.26% and 30-year Treasury bonds edged up to 4.28%. 

Crude oil increased $0.69 to $78.31 a barrel and natural gas prices decreased 1 cent to $2.51 a thermal unit. 

 

U.S. Stock Movers 

Nordstrom Inc dropped 10.5% to $15.05 after the fashion apparel retailer reported better-than-expected quarterly results, revenue of $3.7 billion and diluted earnings per share of 84 cents. 

But investors sold stock after the company reiterated its full-year sales estimate to decline between 4% and 6%. 

Intuit Inc soared 2.9% to $512.99 after the software company reported quarterly results that were ahead of market expectations. 

The software company said revenue in the quarter increased 12% to $2.71 billion and net income of $89 million compared to a loss of $56 million and diluted earnings per share of 32 cents from (0.20 cents) a year ago. 

Ulta Beauty Inc decreased 3.3% to $408.79 after the specialty retailer reported a decline in comparable sales and mixed quarterly results. 

Net sales in the quarter ending in July increased 10.1% to $2.5 billion from $2.3 billion and net income increased $300.1 million from $295.6 million and diluted earnings per share $6.02 from $5.5.70 a year ago.