The Dow Jones and S&P 500 indexes set new records on Wednesday, supported by a 7% jump in Walt Disney shares, whose Disney + streaming video service has attracted 10 million subscribers in 24 hours . Fed Chairman Jerome Powell’s hearing before the US Congress did not bring anything new, but the markets appreciated the optimistic tone of the Fed’s boss on the economic growth of the United States, termed “sustainable”. In addition, investors continue to count on the upcoming signing of the “Phase 1” trade agreement between the United States and China.
At closing, the Dow Jones index gained 0.33% to 27,783 points, while the S&P rose by 0.07% to 3,094 points and Nasdaq Composite, rich in technology and biotechnology stocks, fell slightly, by 0.05%, to 8,482 points.
In his speech to the Joint Economic Committee (Joint Economic Committee) of Congress in Washington, Jerome Powell confirmed that the Fed was planning a break in its cycle of rate cuts. The Fed has lowered its key rate three times this year to bring it back to its current target range of 1.5% to 1.75%, and after its last move on October 30, Jerome Powell had already indicated that only a sharp deterioration of economic conditions could now motivate the central bank to make new bearish gestures.
On Wednesday, he said the Fed is counting on sustainable growth in the United States, as well as a strong labor market and inflation close to 2%, although he stressed a risk persistent concerning global growth and the effects of trade war.
Despite these risks, US growth has so far held up better than other regions of the world, even if GDP growth eased a little in Q3, at + 1.9% year-on-year against + 2% in the second quarter.
Powell has also warned the Trump government against the rise in the federal deficit, a few hours before the announcement of a 34% jump in the deficit in October, to 134.5 billion dollars, despite the sharp rise in customs revenue from tax imposed on China by Donald Trump. “Taxes for our children and grandchildren will be more of a debt repayment rather than (investing in) areas they really need, such as education, health, care and security,” he said.