- US stock markets end higher on Monday
- Jerome Powell hints at cautious approach with monetary policy
- Market mainly driven by corporate earnings reports
United States stock markets ended higher yesterday, continuing an upswing that started when Federal Reserve Chairperson Jerome Powell gave indications that the Fed would move cautiously regarding monetary policy, adapting its stance to changing conditions.
Traders also pondered a new round of corporate earnings, which showed robust growth overall.
The Dow Jones ended 0.2% higher at 25,119.89, marking its eighth increase during the last nine trading days.
The S&P 500 closed 0.40% higher at 2,809.55. The materials sector increased by 1.3%, while both consumer staples and technology shares went up by 0.8%.
The Nasdaq Composite Index ended 0.6% higher at 7,855.12 in its third best performance so far in July.
In his testimony before the Senate Banking Committee, Jerome Powell said that the “best way forward is to keep gradually raising the federal funds rate for now”.
He conceded that it was hard to predict the eventual outcome of trade policy discussions and the timing and extent of the impact of recent fiscal policy changes.
Trade policy has recently been a major driver behind stock markets, but yesterday, a batch of corporate earnings played a big role.
Goldman Sachs Group Inc. reported lower-than-expected revenue but higher-than-expected earnings. It also announced that David Solomon would replace CEO Lloyd Blankfein starting in October. The share price dropped 0.2%.
Second-quarter revenue and earnings for Johnson & Johnson came in above expectations. The share price ended 3.5% higher.
UnitedHealth Group reported lower-than-expected premiums, but its Q2 earnings beat forecasts, increasing its projected earnings for the year. The share price nevertheless dropped by 2.6%.
Netflix shares dropped by 5.2% after subscriber numbers grew less than projected. The share price is still 98% higher than it was at the start of 2018.