Wall Street indices generally climbed at the start of trading Monday after a Federal Reserve announcement about its stimulus measures gave investors clarity on the economic recovery’s future.
The S&P 500 and Nasdaq advanced after posting records at the close of trading Friday, after Fed Chair Jerome Powell said the US economy could be ready for the central bank to slow the pace of its massive bond purchases meant to ease lending conditions during the pandemic.
While he provided few details, the announcement was hotly anticipated for markets, which have soared during the pandemic thanks to the Fed’s easy money policies.
Patrick J. O’Hare at Briefing.com said traders were particularly encouraged by Powell’s statement that even if the bank tapers bond purchases, that doesn’t mean it will soon raise interest rates.
“The bigger catalyst was likely his reminder that any future increase in the target range for the federal funds rate faces a substantially more stringent test and that ‘we have much ground to cover to reach maximum employment,'” he wrote in an analysis.
About 20 minutes into trading, the broad-based S&P 500 was up 0.2 percent at 4,518.34. The tech-rich Nasdaq Composite Index climbed 0.4 percent to 15,186.63.
However the benchmark Dow Jones Industrial Average slid 0.1 percent to 35,407.76.
This week’s marquee event will be the August employment report due out on Friday, which will give the latest update on the labor market as it deal with the fast-spreading Delta variant of Covid-19.
Also on traders’ minds is Hurricane Ida, which lashed New Orleans and much of southern Louisiana overnight and could have damaged petroleum facilities in the area.
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