U.S. indices hit record highs as Powell talks up economy’s strength

• US stocks rose to record highs on Monday after Federal Reserve Chairman Jerome Powell commented on the economy.

• Powell emphasized the strength of the economy and recalibrated interest rate cut expectations.

• Investors are also eyeing the release of key employment data this week for future market direction.

US stocks rose on Monday, with the Dow and S&P 500 closing at record highs as investors digested new comments from Federal Reserve Chairman Jerome Powell.

All three major indexes moved higher in late trade following Powell’s comments about the strength of the U.S. economy.

“This is not a committee that feels like it’s in a rush to cut rates quickly,” Powell said in a question-and-answer session with the National Business Economics Association, discussing the strength of the broader economy.

“Overall, the economy is in solid shape,” Powell said in his prepared remarks. “We intend to use our tools to keep it there.”

Powell’s comments recalibrated interest rate cut expectations in the market.

According to CME’s FedWatch tool, markets now see a 35% chance of a 50 basis point rate cut at the Fed’s November FOMC meeting, down from 53% on Friday.

“We’re not on any set course,” Powell said. “The risks are both sides and we will continue to take the decisions meeting by meeting.”

Here’s where US indices stood at the closing bell at 4pm on Monday:

In addition to the Fed’s comments, investors are bracing for a flurry of employment data this week.

Tuesday’s jobs data, Wednesday’s ADP jobs report, Thursday’s initial jobless claims and Friday’s September jobs report are on the docket this week for investors to pore over.

Economists expect about 145,000 jobs added to the economy in September, with the unemployment rate holding steady at 4.2 percent.

Here’s what else happened today:

In commodities, bonds and crypto:

• West Texas Intermediate crude rose slightly by 0.18% to $68.30 a barrel. Brent crude, the international benchmark, rose 0.43% to $71.85 a barrel.

• Gold fell 0.59% to $2,652.30 an ounce.

• The 10-year Treasury yield was 4 basis points higher at 3.795%.

• Bitcoin fell 3.18% to $63,527.

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