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U.S. stock indexes rose sharply Wednesday as investors welcomed remarks by Federal Reserve Chairman Jerome Powell. Powell hinted that the Fed might be willing to raise interest rates at a slower pace next year, a potential relief for investors worried about slowing economic growth.

Software maker Salesforce led a rally in technology companies and health care stocks were also higher. Luxury retailer Tiffany plunged after saying tourists from China pulled back on spending in its latest quarter.

The S&P 500 index surged 37 points, or 1.4 per cent, to 2,720 as of 12:20 p.m. Eastern time. The Dow Jones Industrial Average jumped 424 points, or 1.7 per cent, to 25,177. About half of that gain came shortly after noon, when the text of Powell’s speech was released.

The Nasdaq composite rose 116 points, or 1.6 per cent, to 7,199. The Russell 2000 index of smaller-company stocks gained 22 points, or 1.5 per cent, to 1,515.

In a speech to the Economic Club of New York, Powell said the financial system and markets appear far sturdier than they did before the 2008 crisis. Recent remarks by Powell and other officials have made investors more hopeful that the Fed might raise interest rates at a slower pace next year.

The Fed has been steadily raising those rates since the end of 2015 and is expected to announce another increase in December. But with economic growth in the U.S. and other regions likely to slow down next year, investors are concerned that rising interest rates will hinder the economy and the bull market.

Bond prices turned higher, sending yields lower. The yield on the 10-year Treasury note fell to 3.04 per cent from 3.05 per cent. The yield on the 2-year note fell to 2.80 per cent from 2.81 per cent.

The dollar fell to 113.60 yen from 113.79 yen. The euro rose to $1.1353 from $1.1296.

Canada’s main stock index rose on Wednesday, driven by strong results from Royal Bank of Canada, which helped lift shares of financial sector.

Also, Alimentation Couche-Tard Inc. rose 3.8 per cent, helping the consumer staples sector gain 1.4 per cent.

The world’s second-biggest convenience store operator beat analysts’ earnings expectation as it earned more from improved fuel sales.

At 12:36 p.m. ET, the Toronto Stock Exchange’s S&P/TSX Composite index was up 152.66 points, or 1.02 per cent, at 15,096.75.

The financials sector gained 1.4 per cent, helped by a 2.4-per-cent gain in shares of Royal Bank of Canada.

Canada’s biggest lender topped quarterly earnings expectations, helped by growth in its retail banking and wealth management divisions.

Thomson Reuters Corp. rose 1.2 per cent, while both Bank of Montreal and Bank of Nova Scotia jumped 1.7 per cent.

Ten of the index’s 11 major sectors were higher.

The Associated Press and Reuters

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 17/05/24 4:00pm EDT.

SymbolName% changeLast
RY-T
Royal Bank of Canada
+0.71%145.34
BNS-T
Bank of Nova Scotia
+0.32%65.91
BMO-T
Bank of Montreal
+0.79%129.63
TRI-T
Thomson Reuters Corp
-0.1%232.72

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