Dow enters bull market as Powell talks up slower hikes ahead

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Dow enters bull market as Powell talks up slower hikes ahead

By Yasin Ebrahim

Investing.com -- The Dow closed in bull market territory after racking up gains on Wednesday as Federal Reserve Chairman Jerome Powell’s signal that rate hikes could slow as soon as next month triggered a sea of green in big tech as Treasury yields slumped.

The Dow Jones Industrial Average rose 2.2%, to enter bull market territory once again after taking its gains since its trough on Sept. 30 to 20%. The S&P 500 gained 3%, and the Nasdaq rose 4.4%

"Moderating the pace of rate increases may come as soon as the December meeting," Powell said in a speech on Wednesday at the Brookings Institution event in Washington.

Powell acknowledged that rates were approaching "the level of restraint that will be sufficient to bring inflation down,” but also added that the rates were still a long way from peak levels.

Data on Wednesday showing that economic growth in the third quarter was higher than expected, and labor demand remains robust, has some on Wall Street expecting that the Fed will likely keep rates higher for longer.         

"If the labor market doesn't begin to roll over, then Powell is going to have to keep his foot on the brakes for longer than he would have otherwise," Mark Heppenstall, chief investment officer at Penn Mutual Asset Management, said in an interview with Investing.com's Yasin Ebrahim on Wednesday. 

"That dynamic [a tight labor market] doesn't look like it's going to unwind too quickly," Mark says, pointing to data on Wednesday showing more job openings than expected.  

Treasury yields slipped sharply following the remarks as investors priced in the prospect of less hawkish fed hikes, helping rate-sensitive tech stocks shine.

Meta Platforms Inc (NASDAQ: META ) led the gains, rising more than 7%, followed by Google (NASDAQ: GOOGL ) and Apple (NASDAQ: AAPL ), up more than 6% and 5% respectively.

On the earnings front, Crowdstrike Holdings (NASDAQ: CRWD ) slumped 15% as it announced slower revenue growth, but reported quarterly results that topped Wall Street estimates. 

Workday Inc (NASDAQ: WDAY ) rallied 17%, meanwhile, as the provider of finance and human-resources software reported third-quarter results beat estimates on both the top and bottom lines despite a challenging macroeconomic backdrop.

In deal news, State Street (NYSE: STT ) said it had mutually walked away from a deal to acquire Brown Brothers Harriman & Co.’s investor services business, citing regulatory hurdles.

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