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The Dow Jones Industrial Average gained 0.7%, 247 points, Nasdaq was up 0.9%, and the S&P 500 rose 0.7% higher. The S&P 500 and Nasdaq snapped a three-week losing streak.
In his Jackson Hole speech Friday, Powell said “restrictive” monetary policy is called for to achieve the Fed’s 2% inflation target.
Bringing inflation back to target is expected to “require a period of below trend economic growth as well as some softening and labor market conditions,” the Fed chief added.
Treasury yields surged in anticipation of a higher-for-longer rate regime, with the 2-year Treasury yield briefly rising close to the cycle highs of 5.12%.
Tech briefly came under pressure from rising Treasury yields, which makes growth sectors like tech with higher valuations less attractive, as Google (NASDAQ:GOOGL) and Meta (NASDAQ:META) cut losses.
Marvell Technology Inc (NASDAQ:MRVL) closed more than 6% lower, to keep a lid on gains in chips despite reporting quarterly results that topped Wall Street estimates as investors weighed the chipmaker’s foray into AI-centric products against a downbeat outlook on memory demand.
“We see Marvell’s cautious commentary on storage (e.g., a slower than expected recovery) as paralleling our conversations regarding continued soft CSP spend on standard servers and the resulting headwinds for NAND/SSD and HDD demand,” Wedbush said in a note.
NVIDIA Corporation (NASDAQ:NVDA), meanwhile, was also a drag on broader tech as investors appear to take some profit on the chipmaker, which has racked up a gain of more than 220% this year, following its recent quarterly results that surprised to the upside.
Gap (NYSE:GPS) rose more than 7%, shrugging off mixed-quarterly results that included weaker second-quarter revenue and third-quarter guidance after falling a cautious outlook on the consumer.
Ulta Beauty Inc (NASDAQ:ULTA), meanwhile, fell more than 3% despite lifting its annual guidance and delivering quarterly results that beat on the top and bottom lines as some question whether robust demand for beauty products is likely to continue amid a weakening consumer.
While the “stellar” demand for beauty products seen in the first of the year is set to moderate, UBS says, Ulta Beauty will be “structurally better positioned over the long-term due to its supply chain, operational investments, and more profitable e-commerce business.
