US Equity Indexes Jump as Powell's Jackson Hole Speech Sends September Rate-Cut Bets Sharply Higher

12:27 PM EDT, 08/22/2025 (MT Newswires) -- US equity indexes surged after midday trading on Friday as bets in favor of a restart of monetary policy easing in September soared after Federal Reserve Chair Jerome Powell indicated a potential policy pivot.

The Dow Jones Industrial Average was 2.1% higher at 45,720.3, after touching a record 45,732.11 earlier in the session. The Nasdaq Composite jumped 2% to 21,520.8, and the S&P 500 climbed 1.7% to 6,476.4.

All sectors except consumer staples rose intraday. Consumer discretionary, materials and industrials led the top gainers.

Earlier this month, the Bureau of Labor Statistics reported non-farm payrolls rose by 73,000 in July, versus consensus for a 104,000 increase. June was revised down by 133,000 to 14,000 and by 125,000 for May. Labor supply and labor force participation growth have softened, Powell said in prepared remarks for delivery at the Kansas City Fed's annual Economic Policy Symposium in Jackson Hole, Wyoming.

"In the near term, risks to inflation are tilted to the upside, and risks to employment to the downside -- a challenging situation," Powell said. "With policy in restrictive territory, the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance."

The odds of a 25-basis-point cut in interest rates in September climbed to 89% by Friday afternoon, up from 75% a day ago, according to the CME FedWatch Tool. The probability of the Fed leaving rates unchanged fell to 11% from 25% a day earlier.

Most US Treasury yields fell, with the 10-year yield down 7.2 basis points to 4.26% and the two-year rate 10.2 basis points lower at 3.69%.

In company news, shares of Enphase Energy (ENPH) advanced 9.2% intraday, the top performer on the S&P 500, after the company reported that all its products subject to the European Union's Radio Equipment Directive Article 3.3 cybersecurity requirements have been certified to be compliant with the rules.

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