New York (CNN Business) – The Dow hit 27,000 points for the first time ever on Wednesday, as stocks climb higher on hopes of an interest rate cut later this month.
Federal Reserve Chairman Jerome Powell shored up rate cut hopes with his testimony before the Senate Banking Committee Thursday and House Financial Services Committee Wednesday.
The Dow (INDU) rose to a fresh all-time intraday high before pulling back slightly. It is up 0.4% or 111 points.
The S&P 500 (SPX) is up a modest 0.1%.The S&P 500 is on track to climb to a fresh all-time high on Thursday, having ended just some three points below the record it set on July 3. The Nasdaq Composite (COMP), which closed at a new all-time high of 8,203 points on Wednesday, slipped into negative territory.
The market shrugged off slightly higher-than-expected consumer price data, released earlier. Inflation rose 1.6% year-over-year in June, as expected, but core inflation rose slightly to 2.1%, versus the expected 2%. Rising inflation doesn’t bode well for the interest rate cut the market is hoping for.
Expectations for a quarter-percentage-point cut at the Fed’s July 31 meeting are 80%, with the remaining 20% hoping for a 50 basis point decrease, according to the CME’s FedWatch tool.
In remarks before the House on Wednesday, Powell noted that inflation continued to be below the central bank’s 2% target.
Powell also cited uncertainties about trade and the global economy as threats to US economic growth during his Wednesday testimony. The market read his comments to mean that an interest rate cut could come at the end of the month.
On the trade front, President Donald Trump earlier tweeted that China is “letting us down in that they have not been buying the agricultural products from our great farmers that they said they would.”The United States and China agreed a ceasefire on raising tariffs on the sidelines of the G20 summit in Japan last month.
Powell is appearing before the Senate Banking Committee on Thursday morning, where his two-day bi-annual testimony will conclude.