US stocks rally as Powell hints at possible rate cuts

US stocks rallied on Friday after Federal Reserve Chair Jerome Powell hinted that interest rate cuts could be on the horizon.

The Dow Jones Industrial Average climbed 462.30 points, or 1.14 per cent, to close at 41,175.08. The Nasdaq Composite rose 1.47 per cent, ending at 17,877.79, while the S&P 500 gained 1.15 per cent, finishing at 5,634.61, just shy of the record highs reached last month.

All three major indexes posted gains for the week. The Dow increased by nearly 1.3 per cent, the Nasdaq by 1.4 per cent, and the S&P 500 by 1.45 per cent.

Small-cap stocks also advanced, with the Russell 2000 rising over 3 per cent on the day.

Turning to US sectors, all sectors closed higher on Friday. Real Estate, Consumer Discretionary and Technology were the top performing sectors. Consumer Staples recorded the fewest gains.

US stocks received a boost early Friday after Powell, speaking at the Federal Reserve's annual Jackson Hole conference, indicated that rate cuts were likely, though he did not specify the timing or magnitude of the reductions.

Investors responded positively, with expectations of a rate cut at the September Fed meeting now widespread, according to the CME Group’s FedWatch Tool. However, there remains uncertainty about the size of the potential cut.

Cava Group stock soared 21 per cent after the release of their second-quarter financial results. The company's earnings per share exceeded market expectations, and its revenue surpassed analysts' forecasts.

In commodity-related news, uranium ETFs surged as Kazakhstan's national uranium miner, Kazatomprom, announced a significant cut in its 2025 production target by over 15 per cent. The Sprott Uranium Miners ETF (URNM) rose more than 8 per cent, and the Global X Uranium ETF (URA) gained over 7 per cent, with Canadian uranium miner Cameco's shares increasing nearly 6 per cent.

India's silver imports are set to nearly double this year due to rising demand from solar panel and electronics manufacturers, along with increased investment demand following a cut in import duties from 15 per cent to 6 per cent in July.

Futures

The SPI futures are pointing to a 0.5 per cent gain.

Currency

One Australian dollar at 7.30am was buying 67.93 US cents.

Commodities

Gold added 1.18 per cent. Silver gained 2.66 per cent. Copper rose 1.41 per cent. Oil gained 2.49 per cent.

Figures around the globe

European markets closed higher. London’s FTSE added 0.48 per cent, Frankfurt gained 0.76 per cent, and Paris closed 0.70 per cent higher.

Turning to Asian markets, Tokyo’s Nikkei added 0.40 per cent, Hong Kong’s Hang Seng lost 0.16 per cent, while China’s Shanghai Composite closed 0.20 per cent higher.

On Friday, the Australian share market closed 0.04 per cent lower at 8023.92.

Ex-dividends
Ansell Limited (ASX:ANN) is paying 32.7648 cents unfranked
Australian United Investment Company (ASX:AUI) is paying 28 cents fully franked
Aurizon Holdings Ltd (ASX:AZJ) is paying 7.3 cents 60 per cent franked
Challenger Limited (ASX:CGF) is paying 13.5 cents fully franked
Domino Pizza Enterpr (ASX:DMP) is paying 50.4 cents unfranked
Diversified United (ASX:DUI) is paying 9 cents fully franked
Hansen Technologies (ASX:HSN) is paying 5 cents 42 per cent franked
Netwealth Group (ASX:NWL) is paying 14 cents fully franked
Shape Aust Corp Ltd (ASX:SHA) is paying 9 cents fully franked
Santos Ltd (ASX:STO) is paying 19.3481 cents unfranked
Step One Limited (ASX:STP) is paying 2.8 cents fully franked

Dividends payable
Goodman Group (ASX:GMG)

Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap, Marketech.

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