US stocks end with records as Fed's Powell signals no rush to end stimulus

VIDEO: REUTERS

NEW YORK (AFP) - Wall Street ended the week with new records after Fed chairman Jerome Powell signalled the central bank could slow its stimulus by the end of the year but is in no rush to raise rates.

The broad-based S&P 500 advanced 0.9 per cent to close at 4,509.37 - its first close over the 4,500 mark - and the tech-rich Nasdaq Composite Index jumped 1.2 per cent to 15,129.50. Both had retreated on Thursday after multiple records.

The benchmark Dow Jones Industrial Average gained 0.7 per cent to end at 35,455.80.

The Federal Reserve's stimulus has helped push equities steadily higher in recent months, and in his highly anticipated speech to the annual Jackson Hole central banking symposium, Mr Powell highlighted the Fed's focus on waiting for the labour market to improve further.

While rising infections from the Delta variant of the coronavirus remain a risk, the Fed chief said the economy should continue to improve and policymakers could start the process of tapering its massive bond purchases by the end of the year.

But the comments at the Jackson Hole central banking symposium did not provide any specifics on the timetable.

Ms Kim Forrest at Bokeh Capital Partners said the focus on fixing employment ahead of inflation means "tapering is moved to a further-off place than investors had anticipated".

Government data released on Friday showed that a key inflation gauge rose 4.2 per cent annually in July, but Mr Powell warned it would be harmful to make an "ill-timed" policy move to respond to temporary price pressures that already appear to be receding.

In individual stocks, interactive exercise equipment maker Peloton dropped 8.6 per cent after reporting lacklustre quarterly results.

But clothing retailer Gap rose 0.6 per cent after a positive earnings report.