S&P 500 and Nasdaq Ended the Week at Record Level

The S&P 500 and Nasdaq ended the week at record level, as Federal Reserve Chairman Jerome Powell pointed out that the contraction will be gradual.

Fed Chairman Powell said that rate hikes could be seen soon as the economy still has a lot of ground. The S&P 500 rose 0.9% to stay close to its previous intraday record of 4,512.03. The Dow Jones Industrial Average gained 0.69%, or 242 points, while the Nasdaq rose 1.2% after breaking an intraday record of 15,136.8. The Fed chairman said at his July meeting that he supports the Fed's plans to contract this year if the economy continues to recover. Powell said, "At the FOMC's last July meeting, I was, like most attendees, of the view that it might be appropriate to begin slowing the pace of asset purchases this year if the economy developed broadly as expected." Also, Powell did not provide new clues about a timeline for contraction, leading some to suggest that the Fed may delay announcing its contraction plans until the November meeting instead of the September meeting. The federal reserve chairman also pointed out that the onset of contraction should not be seen as a trigger for imminent rate hikes. The cyclical sectors of the market, which tend to move in tandem with the economy, rose with energy stocks among the top earners. Tropical hurricane Ida is expected to make landfall as a major hurricane near Louisiana on Sunday, while energy shares rose 3%, supported by a bid in oil prices amid expectations for production cuts. On the economic front, consumer spending rose less than expected in July as inflation continued to pick up. Consumer spending rose 0.3% in July, below the expected 0.4% increase. Personal consumption expenditures, the Fed's preferred inflation indicator, rose 0.4% in July, meeting the expectations of economists.