U.S. Stocks Pause After Powell-Fueled Rally

U.S. stock markets experienced a significant rally following Federal Reserve Chair Jerome Powell's remarks at the Jackson Hole economic symposium, where he indicated that a September interest-rate cut could be warranted due to signs of a weakening labor market. The Dow Jones Industrial Average surged over 850 points to a record high, with the S&P 500 and Nasdaq Composite also reaching near or fresh record levels. Investors reacted positively to Powell's view that inflation pressures might be temporary and that tariffs' effects would be short-lived or one-time price shifts. However, after the initial surge, stock futures pointed to a slight pullback as the market took a pause to digest the rally. Traders are currently pricing in an 87% chance of a 25 basis point rate cut in September, reflecting growing expectations of Fed easing. This broad-based rally benefited both large and small-cap stocks, indicating widespread investor optimism.