Wynn Resorts and Tesla Post Big Gains as Fed Chairman's Comments Buoy Stock Market Federal Reserve Bank Chairman Jerome Powell has the economy's back.
By Andrew Osterland •
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Federal Reserve Bank Chairman Jerome Powell said today that the Fed "will act as appropriate to sustain the expansion" of the economy. The market is currently pricing in two cuts in interest rates by the Fed before year-end.
Powell's message along with encouraging comments from Chinese and Mexican officials about reaching trade deals with the U.S. put a charge in stock prices today. The Nasdaq Composite index was up 2.65 percent after a sharp drop yesterday. The Dow and S&P 500 indexes were up 2.06 percent and 2.14 percent respectively. The Entrepreneur Index™ closed the day with a gain of 2.29 percent.
The technology sector led the market today after one of its worst days of the year yesterday. The tech stocks most sensitive to the economy and to trade tensions had some of the biggest gains today. Semiconductor chip-makers NVIDIA Corp. and Analog Devices were up 6.89 percent and 5.1 percent respectively. Salesforce.com (7.36 percent), TripAdvisor Inc. (6.33 percent) and Twitter (4.85 percent) were also up big. The FAANG stocks all traded higher, though their gains were smaller than the rest of the tech sector. They were down sharply yesterday on fears of anti-trust investigations by the government. Netflix, not in the crosshairs of government regulators, had the biggest gain in the group today rising 4.98 percent.
Related: FAANG Stocks Fall as Reports of Government Investigations Scare Investors
Other stocks down recently on fears about trade wars were up nicely today. Ford Motor Co. and truck-maker PACCAR Inc., both expected to be hurt by potential tariffs against Mexico, were up 3.23 percent and 3.61 percent respectively. Fedex Corp., a good barometer of global economic sentiment, was up 4.76 percent. The apparel makers, most of whom source products in China and other overseas markets, also had strong gains. L Brands (5.49 percent), Ralph Lauren Corp. (4.21 percent) and Under Armour Inc. (4.79 percent) were all up sharply.
Wynn Resorts had the biggest gain on the index today, rising 8.98 percent. Shares in Wynn, which operates three casinos in Macau, were down more than 25 percent in May as trade negotiations between the U.S. and China broke down. They are still up 14.1 percent for the year.
Tesla also had a big jump today, gaining 8.17 percent and halting the stock's free-fall over the last month. Optimism about trade may have helped, but the plunge in the share price may have finally attracted some value investors who still believe in the future of the electric vehicle pioneer. The shares are down 42.1 percent this year.
REITs were the only notably weak sector in the market today, accounting for four of the five declines on the Entrepreneur Index™. With long-term interest rates rising sharply today, REITs and their high dividend yields look relatively less attractive. Equity Residential (-1.0 percent) and Extra Space Storage (-0.64 percent) had the biggest losses in the sector and on the index today.
The Entrepreneur Index™ collects the top 60 publicly traded companies founded and run by entrepreneurs. The entrepreneurial spirit is a valuable asset for any business, and this index recognizes its importance, no matter how much a company has grown. These inspirational businesses can be tracked in real time on Entrepreneur.com.
