There were a lot of things for investors to focus on Wednesday, including ADP November jobs report weaker than expected, a stubbornly high level of job vacancies and an upwardly revised second quarter gross domestic product (GDP) reading. However, the main event was a mid-afternoon speech by Federal Reserve Chairman Jerome Powell – and stocks reacted strongly to what the chief central banker had to say.
During a speech at the Brookings Institution today, Powell said “the time to moderate the pace of rate increases may come as early as the December meeting.” However, he balanced that dovish tone by adding that “the way forward for inflation remains highly uncertain” and that “history strongly cautions against premature policy easing.”
“While most of Chairman Powell’s comments were mild and predictable, investors may be spooked by the president’s admission that ‘the way ahead for inflation remains highly uncertain,'” said Jeffrey Roach, economist in head at LPL Financial. “Overall, this talk is likely to be bullish for markets in the near term.”
Sign up for Kiplinger’s free email newsletters
Enjoy and thrive with Kiplinger’s best expert advice on investing, taxes, retirement, personal finance and more – straight to your email.
Profit and thrive with the best expert advice from Kiplinger – straight to your email.
And that was certainly the case today, with stocks moving significantly higher in the late afternoon. The tech-heavy Nasdaq Compoundwhose components are most interest rate sensitive, jumped 4.4% to 11,468, the S&P 500 Index added 3.1% to 4,080, and the blue-chip Dow Jones Industrial Average rose 2.2% to 34,589. All three indexes also closed higher in November, marking their second straight month of gains.
Wall Street’s Favorite Oil Stocks
Equities weren’t the only corner of the market to post outsized gains today. U.S. Crude Futures jumped 3% to $80.55 a barrel after data showed domestic crude inventories fell last week. Specifically, the Energy Information Administration said this morning that crude inventories fell 12.6 million barrels in the week ended Nov. 25, compared to the consensus estimate of a 4. 4 million barrels. This is a third consecutive week of falling stocks.
While the news sent oil futures to their highest close in more than a week, they still ended the month down almost 7%. Volatility in energy markets has made it harder for investors to find opportunities, but analysts believe these three names are among the top oil stocks at present.