Dow Soars After Powell Speech

Homebuilder, travel company shares climb as hopes rise for interest rate cut
By Newser Editors and Wire Services
Posted Aug 22, 2025 3:44 PM CDT
Dow Soars After Powell's Speech
Federal Reserve Chairman Jerome Powell, right, takes a walk in Moran, Wyoming, on Friday with Christine Lagarde Kazuo Ueda and Andrew Bailey during a break at the Jackson Hole Economic Policy Symposium.   (AP Photo/Amber Baesler)

Wall Street rallied to its best day in months on Friday after the head of the Federal Reserve hinted that cuts to interest rates may be on the way, along with the kick they can give the economy and investment prices. The S&P posted its first gain in six days and finished just shy of its all-time high set last week.

  • The Dow rose 846.24 points, or 1.9%, to 45,631.74, finishing the week up 1.5%.
  • The S&P 500 rose 96.74 points, or 1.5%, to 6,466.91, ending the week up 0.3%.
  • The Nasdaq rose 396.22 points, or 1.9%, to 21,496.53, but closed the week down 0.6%.

"Ka-Powell" is how Brian Jacobsen, chief economist at Annex Wealth Management, described the reaction to Jerome Powell's speech in Jackson Hole, Wyoming. "The Fed isn't going to be the party-pooper." The hope among investors had been that Powell would hint that the Fed's first cut to interest rates of the year is imminent. Wall Street loves lower rates because they can goose the economy, even if they risk worsening inflation at the same time. Stocks of smaller companies led the way on Friday; they can benefit more from lower interest rates because of their need to borrow money to grow.

The smaller stocks in the Russell 2000 index surged 3.9% for its best day since April and more than doubled the S&P 500's rally. Homebuilders jumped on hopes that easier interest rates could encourage more people to buy homes. Lennar, PulteGroup, and DR Horton all rose more than 5%. Travel companies climbed amid hopes that easier interest rates could help US households spend more. Norwegian Cruise Line rallied 7.2%, Delta Air Lines flew 6.7% higher, and Caesars Entertainment rose 7%. Intel climbed 5.5% after President Trump said the chip company has agreed to give the US government a 10% stake in its business.

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