A television station displays Jerome Powell speaking at the Kansas City Federal Reserve's Jackson Hole Economic Policy Symposium on the floor of the New York Stock Exchange on Aug. 23. Read More: Powell Says ‘Time Has Come’ for Fed to Cut Interest Rates
The benchmark has rallied more than 9% since hitting a low on Aug. 5 as risk assets recover from a bout of severe volatility. The dollar also weakened alongside lower Treasury yields on growing expectations that the Fed will start easing monetary policy at its next meeting in September.
Equities have had a turbulent month after mixed US employment data in early August heightened fears about the likelihood of a recession. Traders’ anxiety was exacerbated by Japan raising borrowing costs for the first time in 17 years and a flight from crowded equity trades such as big tech, sparking a global selloff.
Since then, concerns about the outlook of the US economy have eased on the back of resilient consumer demand. US inflation has also continued to recede. Traders now expect about 100 basis point of cuts through December, according to swaps data.
The S&P 500 is less than 1% away from an all-time high, while the tech-heavy Nasdaq 100 still has to make up over 4% to recover the past weeks’ losses. Meanwhile, benchmarks in Japan, Taiwan and Korea, among the most battered during the recent selloff, have become top global performers.