STORY: U.S. stocks posted gains on Thursday, lifted mainly by banks and healthcare companies, as investors digested remarks from Federal Reserve Chair Jerome Powell that appeared to confirm bets of a large interest rate hike later this month.
The Dow, S&P and Nasdaq were each up about six-tenths of a percent.
Powell said the central bank is "strongly committed" to bringing inflation down and needs to keep going until it gets the job done.
Loreen Gilbert is CEO of WealthWise Financial Services.
“The markets interpreted that speech as positive in that he indicated that while they are going to be fighting inflation with rate hikes, they also hope to do so without too much of a cost to people – which is in some way a little bit different tone that what he said at Jackson Hole, when he talked about the pain for consumers and businesses.”
Bank of America, Barclays and Jeffries said they now see a 75-basis points interest rate hike coming at this month’s Fed meeting.
The increasing odds of another outsized rate hike boosted both the rate-sensitive S&P 500 bank index and the S&P 500 healthcare sector.
The Healthcare sector was also lifted by positive news about an anti-blindness treatment from Regeneron Pharmaceuticals. The drugmaker's shares jumped more than 18%.
In other movers, GameStop surged more than 7% after the video game retailer reported a smaller-than-expected quarterly loss… and American Eagle Outfitters tumbled almost 9% after the apparel maker missed second-quarter profit estimates and said it would pause its quarterly dividend as it fortifies its finances against a hit from inflation.