Stock market aims for another round of records as bulls bank on Fed rate cut

Stock-index futures indicate Wall Street will attempt to push further into record territory Friday, after Federal Reserve Chairman Jerome Powell in two days of congressional testimony bolstered investor expectations for a rate cut at the end of the month.

Futures on the Dow Jones Industrial Average YMU19, +0.28%  rose 74 points, or 0.3%, to 27,151, while S&P 500 futures ESU19, +0.20%  gained 6.1 points, or 0.2%, to 3,010. Nasdaq-100 NQU19, +0.21%  were 18 points higher at 7,936.75, a gain of 0.2%.

The Dow DJIA, +0.85%  on Thursday rose 227.88 points, or 0.8%, to 27,088.08, marking its first close above 27,000. The S&P 500 SPX, +0.23%  also pushed back into record territory, advancing 6.84 points, or 0.2%, to end at 2,999.91. The Nasdaq Composite COMP, -0.08% which scored a record close on Wednesday, pulled back, ending 6.49 points lower Thursday at 8,196.04, a loss of 0.1%.

Read: The Dow components that drove the blue-chip stock index to a 27,000 milestone

Powell, in Thursday testimony before the Senate Banking Committee, said the U.S. economy is in a “very good place” but had only partly recovered from a “confidence shock” it suffered in May. Powell’s comments on Thursday, and his appearance before a House panel on Wednesday, were seen affirming expectations the Fed will move at its July 30-31 meeting to cut its fed-funds rate by at least a quarter point and to potentially deliver further cuts before year-end.

Powell’s “downbeat tone when reflecting on the economic outlook and inflation combined with his complete lack of desire to correct market expectations, despite a cut being 100% priced in this month, gave investors exactly what they wanted,” said Craig Erlam, senior market analyst at Oanda, in a note.

See: An economy gone ‘mad’? The Fed is going to cut interest rates despite record stock prices, low unemployment

Trade data from China, meanwhile, showed the country’s exports fell last month as external demand softened, while imports showed a more substantial drop. News reports also noted a widening of China’s trade surplus with the U.S. to $29.92 billion from $26.9 billion in May.

Factory output across the eurozone rose sharply in May, which economists said may be a sign the region’s manufacturing sector is stabilizing after a long slowdown.

The U.S. economic calendar features the June producer-price index at 8:30 a.m. Eastern. Economists surveyed by MarketWatch are looking for a 0.1% drop in wholesale prices following a 0.1% rise in May.

Earnings season gets under way in earnest next week, with a slew of big banks set to kick off the festivities.

See: Banks should shine among S&P 500 stocks this earnings season

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