Powell's Gentle Approach Fuels Wall Street Surge, S&P 500 Recovers from Decline

Interest Rate Cut Speculation: Federal Reserve Chair Jerome Powell hinted at a possible interest rate cut in September, leading to a significant rally on Wall Street and the largest cross-markets surge since April.

Market Reactions: Following Powell's speech, the S&P 500 Index rose by 1.5%, while the Russell 2000 surged nearly 4%. Risk assets like Bitcoin and gold also increased, with a notable drop in two-year yields.

Dovish Tone and Economic Outlook: Powell's comments indicated a willingness to adjust policies based on shifting economic risks, although some central bank officials warned that a September cut was not guaranteed.

Data-Dependent Approach: Despite market optimism, Powell emphasized a data-dependent approach, making it difficult to predict the extent of future interest rate cuts amidst ongoing uncertainties.