Wall Street ends higher after Fed chief's comments, but notches weekly loss
People work on the options floor at the New York Stock Exchange in New York, Tuesday, March 4, 2025. (AP Photo/Seth Wenig)
NEW YORK: US stocks finished higher on Friday (Mar 7), rebounding from early declines after Federal Reserve Chair Jerome Powell said the economy was "in a good place," but stocks still posted a weekly loss on uncertainty about US trade policy.
Powell said the central bank will not be quick to cut interest rates and echoed concerns about President Donald Trump's policies.
Markets have been roiled this week by uncertainty about Trump's tariff decisions on imported goods from Canada, Mexico and China.
Powell said the Fed will take a cautious approach to monetary policy easing, adding the economy currently "continues to be in a good place".
"Powell is echoing what the rest of us feel: unease that while the adjustments made by the administration may well work and put the country on better financial footing, the speed and whipsaw-like nature of the change makes it difficult to predict and to plan around," said Jamie Cox, managing partner at Harris Financial Group in Richmond, Virginia. "So, the best action when that occurs is to sit and wait."
Stocks fell in choppy early trade, but rebounded after Powell's comments. The three main indexes ended the week lower. In the previous session, the Nasdaq confirmed a 10 per cent drop from its December all-time high.
According to preliminary data, the S&P 500 gained 31.17 points, or 0.55 per cent, to end at 5,769.69 points, while the Nasdaq Composite gained 123.91 points, or 0.70 per cent, to 18,193.16. The Dow Jones Industrial Average rose 215.18 points, or 0.51 per cent, to 42,794.26.
Data early on Friday showed US job growth picked up in February from the previous month. However, thousands of recent firings of federal workers were not reflected in the data.
Unemployment ticked up to 4.1 per cent, adding to worries about the economy's resilience. Morgan Stanley and Goldman Sachs have lowered their growth forecasts for the economy.
"This is a growth scare," said Adam Hetts, portfolio manager at Janus Henderson Investors. "This is what it feels like to go from a no-landing to a soft-landing environment and it's unpleasant. It involves a spate of unpleasant economic data, and the primary driver being weaker consumer spending."
On Thursday, Trump offered a four-week reprieve on tariffs he imposed on imports from Canada and Mexico that fall under a free-trade pact. The US remains in a trade war with China.
Reciprocal trade barriers and other duties are expected to take effect in the following weeks.
Hewlett Packard Enterprise slumped after saying its annual profit forecast would be hit by US tariffs.
Costco fell after the retailer missed Wall Street estimates on quarterly earnings as merchandise costs increased.
Broadcom gained after the chipmaker assuaged investor worries about artificial intelligence infrastructure demand with a strong second-quarter forecast.
