Market Rally Fueled by Powell’s Jackson Hole Remarks

The stock market closed out the week on a strong note after Fed Chair Jerome Powell’s remarks at the Jackson Hole symposium sparked hopes of a September rate cut. His acknowledgment that restrictive policy settings may warrant adjustment was taken as a signal of openness to easing, lifting sentiment across Wall Street and fueling a broad rally.

The DJIA surged 1.9%, setting new intraday and closing records at 45,757.84 and 45,631.74, respectively. The S&P 500 climbed 1.5%, coming within a few points of its all-time high before finishing just shy of a record close. The Nasdaq Composite advanced 1.8%, regaining ground but still trailing earlier records after losses earlier in the week. The probability of a 25-basis point cut at the September FOMC meeting rose to 83.1% from 75.0% yesterday, though it remained below levels seen earlier in the day as lingering inflation concerns kept some caution in play.

Small-cap stocks thrived in this rate-friendly environment, with the Russell 2000 jumping 3.8% to become the week’s top performer. The S&P Mid Cap 400 added 2.7%, while the Invesco S&P 500 High Beta ETF rose 3.3%, reflecting a strong appetite for risk. Homebuilders were also standouts, as the iShares U.S. Home Construction ETF soared 5.6% on the day.

Mega-cap stocks enjoyed a rebound, with the Vanguard Mega Cap Growth ETF gaining 1.5% despite finishing the week down 1.1%. Tesla was a standout, surging 6.2% and lifting the consumer discretionary sector, which led all groups with a 3.2% gain. Energy, communication services, materials, and financials also saw strong advances, while only the defensive consumer staples sector slipped modestly into the red. Semiconductor stocks rallied after a choppy week, with the Philadelphia Semiconductor Index rising 2.7% to finish the week unchanged.

Market breadth underscored the rally’s strength, with advancers outpacing decliners nearly 10-to-1 on the NYSE and more than 5-to-1 on the Nasdaq. After a challenging stretch earlier in the week, Powell’s comments restored confidence and set a positive tone heading into the final stretch of August, with traders positioning for what could be the beginning of a more accommodative policy path.

FTInvest 11 closed the week on a strong note, gaining 1.5% in Friday’s session and 1.23% for the week as a whole. The index ended at 850.49, just 0.17% below its historical maximum, underscoring its ability to sustain upward momentum even after an extended rally.

The week was marked by steady resilience, with FTinvest 11 comfortably outpacing the broader U.S. benchmark. The S&P 500 managed a 0.27% gain for the week, but the sharper advance in FTinvest 11 highlights the portfolio’s ability to build on favorable market sentiment and capture opportunities more effectively than the broader market.

Friday’s surge was particularly notable, as the portfolio’s 1.5% daily gain erased earlier fluctuations and reaffirmed investor confidence. Closing the week just shy of record highs reflects both strength in underlying components and a willingness by market participants to maintain a bullish posture despite lingering macro uncertainty.

Overall, the week leaves FTinvest 11 in a commanding position near its peak levels, showing relative strength over the benchmark and reinforcing the view that its current trend remains solidly upward.