Wall Street opens higher as rate cut expectations grow
Wall Street opened with gains on Friday as new indications the Federal Reserve will cut interest rates and strong Microsoft earnings overshadow ongoing concerns over the fate of U.S.-China trade talks.
In a speech on Thursday, Federal Reserve President John Williams urged the central bank to “act quickly” amid a slowdown in U.S. economic growth.
The comments, which investors interpreted as a nod to the expected rate reductions at the end of July, took markets into positive territory after declines for much of the day.
A Fed spokesperson, however, later clarified that the speech was not meant to give any indication to the central bank’s pending decision at the two-day meeting beginning on July 30.
Later in the day, Federal Reserve Vice Chair Richard Clarida backed a quick cut to interest rates during an interview with FOX Business.
While investors continue to guess at the Fed’s future actions, the dashed hopes for a quick trade deal with China after negotiations broke down in May continued to be a drag on the top three equity benchmarks. Weak earnings from Netflix also weighed on the exchanges.
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On Friday, strong financial results from Microsoft through June, as well as Boeing’s announcement that it would take a nearly $5 billion hit from the Max grounding, are behind the increases in the Dow Jones Industrial Average.
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