Stock market news live updates: S&P 500, Nasdaq rise to record highs amid Powell's Jackson Hole remarks

Stocks gained Friday to shake off losses from a day earlier, as traders considered a key speech from Federal Reserve Chair Jerome Powell.

The S&P 500 advanced, led by gains in the energy, materials and communication services sectors. On Thursday, the index closed lower to end a five-session winning streak and pull back from an all-time high. The Dow added more than 200 points, or 0.6%, while the Nasdaq added nearly 1% as Treasury yields fell across the curve. 

Federal Reserve Chair Jerome Powell’s Jackson Hole speech on Friday provided a fuller picture of the central bank leader’s thinking about the pace of the economic recovery in light of the latest Delta variant threat. Despite comments from more hawkish Fed officials lately, Powell’s remarks remained more dovish, suggesting he was more inclined to wait to see the further progress made in the economy before adjusting policy and tapering asset purchases. 

“Today, with substantial slack remaining in the labor market and the pandemic continuing, such a mistake could be particularly harmful,” Powell said in prepared remarks.

However, he also added that “If the economy evolved broadly as anticipated, it could be appropriate to start reducing the pace of asset purchases this year,” while acknowledging the lingering downside risk of the Delta variant. Powell also reiterated that he believes current elevated levels of inflation will prove transitory, and pass as the economic recovery matures further. 

The remarks were taken as dovish by market participants, with stocks extending gains as Powell spoke. The speech also diverged from more hawkish comments from other Fed members as of late. Federal Reserve Bank of Kansas City President Esther George told Yahoo Finance’s Brian Cheung earlier this week that she would prefer to begin removing monetary policy accommodation and begin tapering asset purchases “sooner rather than later” as the economy continues to recover. George serves as an alternate voting member of the Federal Open Market Committee this year, and will be a voting member next year.

For equities, even given Thursday’s pullback, the S&P 500 has managed to hold near all-time highs, boosted by a bevy of stronger-than-expected second-quarter earnings results, solid economic data, and still-accommodative policies from the Fed. The index has so far risen 19% for the year-to-date, and is on track for a nearly 2% gain in August.

“One has to be careful about focusing on issues over the short term over volatility and really getting swayed from making proper long-term decision,” Steven Wieting, Citi Global Wealth chief investment strategist, told Yahoo Finance. “Generally speaking, for example, a market that’s fallen 20% is going to generate higher returns than a market that’s rallied 20%. And this conundrum is always with us: We really feel better about markets that have performed well … but they’re really areas where you have to really reestimate what the future returns will look like.”

10:20 a.m. ET: Stocks hit record highs as Powell gives virtual remarks at Jackson Hole

Here’s where markets were trading Friday morning: 

  • S&P 500 (^GSPC): +34.71 (+0.78%) to 4,504.72

  • Dow (^DJI): +233.95 (+0.66%) to 35,447.07

  • Nasdaq (^IXIC): +131.14 (+0.88%) to 15,078.55

  • Crude (CL=F): +$1.18 (+1.75%) to $68.60 a barrel

  • Gold (GC=F): +$5.60 (+0.31%) to $1,800.80 per ounce

  • 10-year Treasury (^TNX): -1.3 bps to yield 1.331%

10:17 a.m. ET: Powell maintains ‘transitory’ inflation view, says he sees ‘little evidence of wage increases that might threaten excessive inflation’

Federal Reserve Chair Jerome Powell maintained his previously telegraphed view that the current, elevated levels of inflation in the recovering economy would ultimately prove transitory. Powell also specified that wage increases were unlikely to produce a sustained surge in inflation, even given ongoing worker supply shortages and rising compensation costs among companies across industries. 

“Businesses and consumers widely report upward pressure on prices and wages. Inflation at these levels is, of course, a cause for concern,” Powell said. “But that concern is tempered by a number of factors that suggest that these elevated readings are likely to prove temporary.”

“Longer-term inflation expectations have moved much less than actual inflation or near-term expectations, suggesting that households, businesses, and market participants also believe that current high inflation readings are likely to prove transitory and that, in any case, the Fed will keep inflation close to our 2% objective over time,” Powell added.

“Today we see little evidence of wage increases that might threaten excessive inflation,” he said.

10:07 a.m. ET: Powell suggests taper could begin by year-end given labor market progress, but says policy change too early could be ‘particularly harmful’

Federal Reserve Chair Jerome Powell began delivering his speech at the Jackson Hole Symposium Friday morning. In these, he noted that the economy and labor market especially have picked up in their recovery, albeit with some risks still lingering especially as the Delta variant continues to spread. 

“Favorable conditions for job seekers should help the economy cover the considerable remaining ground to reach maximum employment,” Powell said in prepared remarks at the event. Still, he noted that labor shortages remain an issue, and that making a policy mistake given current labor slack “could be particularly harmful.” 

Ultimately, the economy is still making progress toward the Fed’s dual goals of reaching maximum employment and price stability in the economy, suggesting “it could be appropriate to start reducing the pace of asset purchases this year,” Powell said. 

9:30 a.m. ET: Stocks open higher 

Here’s where markets were trading shortly after the opening bell Friday morning: 

  • S&P 500 (^GSPC): +11.75 (+0.26%) to 4,481.75

  • Dow (^DJI): +65.17 (+0.19%) to 35,278.29

  • Nasdaq (^IXIC): +37.03 (+0.24%) to 14,981.56

  • Crude (CL=F): +$1.42 (+2.11%) to $68.84 a barrel

  • Gold (GC=F): -$2.20 (-0.12%) to $1,793.00 per ounce

  • 10-year Treasury (^TNX): unchanged to yield 1.344%

8:30 a.m. ET: Personal income rises by the most since March in July, while spending slows

U.S. personal income rose at the fastest pace in four months in July, reflecting both the broadening pick-up in economic activity as more vaccinations took place, and increased government benefits as new advance Child Tax Credit payments came into effect. 

Income increased 1.1% in July compared to June, the Bureau of Economic Analysis said Friday morning. This was a stronger rise than the 0.3% increase expected, and accelerated from June’s 0.2% monthly pace. 

Personal spending, meanwhile, slowed to a just 0.3% clip in July, decelerating from June’s 1.1% advance. 

The personal saving rate ticked up to 9.6% from June’s 9.4%. This level has come down from a peak of more than 33% in April 2020, but remains elevated compared to pre-pandemic levels. 

7:15 a.m. ET Friday: Stock futures gain as traders await Powell

Here were the main moves in markets as of 7:15 a.m. ET: 

  • S&P 500 futures (ES=F): +12.5 points (+0.29%) at 4,479.25

  • Dow futures (YM=F): +79 points (+0.22%) to 35,239.00

  • Nasdaq futures (NQ=F): +51 points (+0.33%) to 15,325.74

  • Crude (CL=F): +$1.06 (+1.57%) to $68.48 a barrel

  • Gold (GC=F): +$0.40 (+0.02%) to $1,795.00 per ounce

  • 10-year Treasury (^TNX): unchanged, yielding 1.344%

6:38 p.m. ET Thursday: Stock futures edge up

Here’s where markets were trading Thursday evening:

  • S&P 500 futures (ES=F): +3.5 points (+0.08%) at 4,470.00

  • Dow futures (YM=F): +28 points (+0.08%) to 35,188.00

  • Nasdaq futures (NQ=F): +13.25 points (+0.09%) to 15,288.00

NEW YORK, NEW YORK - AUGUST 10: People walk by the Fearless Girl statue outside of the New York Stock Exchange (NYSE) on August 10, 2021 in New York City. Markets were up in morning trading as investors look to a rare bipartisan effort in the Senate to pass a massive infrastructure bill that, if passed, will infuse billions into the American economy. (Photo by Spencer Platt/Getty Images)

NEW YORK, NEW YORK – AUGUST 10: People walk by the Fearless Girl statue outside of the New York Stock Exchange (NYSE) on August 10, 2021 in New York City. Markets were up in morning trading as investors look to a rare bipartisan effort in the Senate to pass a massive infrastructure bill that, if passed, will infuse billions into the American economy. (Photo by Spencer Platt/Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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