U.S. Federal Reserve Chairman Jerome Powell delivered a speech at the 'Jackson Hole' conference yesterday, amid market anticipation and caution among investors.
Typically, markets rely directly on Powell's remarks and try to glean signals from him regarding the prospects for monetary policy and the future of interest rates in the upcoming period.
Powell hinted during his remarks at the possibility of interest rate cuts at the upcoming September meeting if economic conditions are favorable for that.
He warned of the implications of high U.S. tariffs recently imposed on future inflation rates.
He explained that the latest official data showed a slowdown in the labor market, increasing the likelihood of a significant and rapid rise in the unemployment rate if new shocks emerge.
He continued, 'When our goals contrast between price stability and job support, we must balance both sides with caution and precision.'
Powell's remarks had a strong impact on global markets, which awaited him with great anticipation and caution, as all eyes were on his speech, which would outline the contours of future monetary policy.
- U.S. Stocks
Following Powell's speech, U.S. stocks rose sharply, with the 'S&P 500' index jumping by 1.4%, recovering all the losses incurred during the week, after recording losses for five consecutive sessions, having reached an unprecedented record level last week.
The 'Dow Jones' index reached its highest level ever during yesterday's trading, rising by about 1.6%, while the 'Nasdaq' composite rose by approximately 1.3%.
- European Stocks
European stocks closed higher during Friday's trading after recording early session losses, thanks to improved investor sentiment after Jerome Powell hinted at the possibility of cutting interest rates soon.
The main European index 'Stoxx Europe 600' rose by 0.4% to 561.3 points, recording weekly gains of 1.45%.
The German 'DAX' index rose by 0.3% to 24,363 points, the French 'CAC' rose by 0.4% to 7,969 points, and the British 'FTSE (LON:LSEG)' rose slightly by 0.15% to 9,321 points.
- Dollar
The dollar index - which measures the performance of the U.S. dollar against six other major currencies - fell by 0.43% to 98.18 compared to 98.7 before Powell's remarks.
In contrast, the euro rose by about 0.15%, reaching $1.1664, while the U.S. dollar lost about 0.51% against the Japanese yen to reach 147.61.
- U.S. Bonds
U.S. Treasury yields fell after Powell opened the door for interest rate cuts next month.
The yield on two-year Treasury bonds - highly sensitive to interest rates - fell by 9.4 basis points to 3.698%.
The yield on the benchmark 10-year Treasury bonds fell by 6.9 basis points to 4.262%.
- Gold and silver
Gold prices rose at the close of trading on Friday, with increasing hopes for a cut in U.S. interest rates at the upcoming September meeting.
It is noted that gold is one of the biggest beneficiaries of low interest rates, as it does not yield returns, making it more attractive than yield-bearing assets.
Spot gold increased by 1.1% to $3,373.89 per ounce, while U.S. gold futures also rose by the same percentage to close the session at $3,418.50.
Spot silver prices rose by 2.2% to $39.01 per ounce, while platinum prices increased by 0.7% to $1,362.90, and palladium prices rose by 1.4% to $1,125.53.
- Oil Prices
Oil prices fell during yesterday's trading after hopes for a resolution to end the military conflict between Russia and Ukraine faded, leading to increased pressure on prices.
The price of the global benchmark 'Brent' crude fell by 0.15% to $67.57 per barrel, while U.S. West Texas Intermediate crude declined by 0.02% to $63.51 per barrel.$ETH $BNB
