The S&P 500 and the Nasdaq hit new record highs on Friday after Federal Reserve Chairman Jerome Powell affirmed U.S. economic strength and said the central bank`s gradual interest rate hikes were the best way to protect the economic recovery.
The Fed`s current approach to rate increases is designed to keep job growth as strong as possible and inflation under control, Powell said. His comments did little to change market expectations of a rate hike in September and perhaps again in December.
Investors said they were reassured that Powell`s comments stayed in line with previous commentary from the Fed regarding its policy.
"He made it very clear that the Fed is not going to surprise the market with a more accelerated pace of rate hikes," said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.
The Dow Jones Industrial Average <.dji> rose 129.95 points, or 0.51 percent, to 25,786.93, the S&P 500 <.spx> gained 16.79 points, or 0.59 percent, to 2,873.77 and the Nasdaq Composite <.ixic> added 64.62 points, or 0.82 percent, to 7,943.07.
The S&P 500 will confirm its longest-ever bull market run if it ends the session above its Jan. 26 record close.
The small-cap Russell 2000 index <.rut> touched a record high and was last up 0.4 percent.
A dip in the dollar <.dxy> after Powell`s comments helped lift materials and energy stocks as the prices of oil and metals rose. The S&P 500 materials sector <.splrcm> jumped 1.4 percent, the biggest percentage gain among the 11 major S&P sectors.
Economic data also boosted sentiment. New orders for key U.S.-made capital goods increased more than expected in July and shipments growth held firm, the Commerce Department said.
Shares of Gap Inc
Advancing issues outnumbered declining ones on the NYSE by a 2.14-to-1 ratio; on Nasdaq, a 1.69-to-1 ratio favoured advancers.
The S&P 500 posted 36 new 52-week highs and four new lows; the Nasdaq Composite recorded 145 new highs and 27 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)