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

01:38 PM EDT, 08/22/2025 (MT Newswires) -- US equity indexes soared as bets favoring monetary policy easing in September rose after a potential monetary policy pivot signal from Federal Reserve Chair Jerome Powell sent yields on government bonds sharply higher.

The Dow Jones Industrial Average traded 2% higher at 45,699.9, after touching a record 45,732.11 earlier in the session. The Nasdaq Composite jumped 1.8% to 21,482.7, and the S&P 500 climbed 1.6% to 6,469.1.

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

Earlier in August, 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 shift in Powell's stance supported Jefferies' expectation for three rate cuts this year, beginning next month, according to a research note. Powell removed some of the barriers and conflicts that have prevented the Federal Open Market Committee from "cutting rates, and opened the door for an 'adjustment'."

The odds of a 25-basis-point cut in interest rates in September catapulted 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 7.4 basis points to 4.26% and the two-year rate 10.6 basis points lower at 3.69%.

Gold futures jumped 1% to $3,415.3 per ounce, while silver futures advanced 2.4% to $38.98.

The ICE US Dollar Index slumped 1% to 97.68.

In company news, shares of Enphase Energy (ENPH) advanced 9.8% 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.

Workday (WDAY) shares dropped 3.5% intraday, among the steepest decliners on the S&P 500 and the Nasdaq, after the company said it signed a definitive agreement to acquire Paradox, a conversational AI firm focused on streamlining the job application and hiring process.

Tesla (TSLA) Chief Executive Elon Musk tried to enlist Meta Platforms (META) CEO Mark Zuckerberg for an unsolicited bid his consortium made to buy Microsoft (MSFT)-backed (MSFT) OpenAI earlier this year, OpenAI said Thursday in a court filing. Shares of the electric vehicle manufacturer jumped 5.3% intraday, among the top gainers on the Nasdaq.

In geopolitical news, peace negotiations between Russia and Ukraine stalled as Moscow's demands that Kyiv relinquish control of the Donbas region and abandon aspirations to join the North Atlantic Treaty Organization have been rejected by Ukraine.

"Trying to get a peace deal between Russia and Ukraine is very complicated, and the market isn't as sure as they were only last week," Phil Flynn, senior analyst at Price Futures, said in a Friday note.

West Texas Intermediate crude oil futures rose 0.3% to $63.69 a barrel, extending recent gains.

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