Stocks Pull Back After Powell Speech Rallied the Dow to a New High
Stocks are a touch lower on Monday as investors take some profit off the table.
The Dow Jones Industrial Average was down 86 points, or 0.2% at the open, after hitting its highest ever level on Friday. The S&P 500 was down 0.2%, and the Nasdaq Composite was down 0.3% after seeing a big boost on Friday.
Federal Reserve Chair Jerome Powell’s speech Friday gave a clear signal to investors that the central bank is readying to lower interest rates, driving a rapturous rally in stocks. Lower rates boost stocks because they increase the present value of a company’s future cash flows in financial models. They also reduce the incentive of investing in safer, yield bearing government bonds.