Stocks rose, bond yields fell after Powell reassured investors, easing recession fears.

From Yahoo Finance: 2025-03-19 19:21:00

Stocks rose and bond yields fell after Fed Chair Jerome Powell reassured investors about trade war impacts. Powell’s tone on recession risk eased market concerns, boosting stocks. The Fed also announced a slower pace of balance sheet reduction. The S&P 500 gained 1.1%, Nasdaq 100 rose 1.3%, and Dow Jones added 0.9%. Treasury yields declined, and the dollar rose 0.2%.

Powell’s dovish stance led to market gains despite Fed forecasts showing bearish signals. Investors reacted positively as most negative economic factors were already priced in. Money managers are now rebuilding equity positions after record US equity holdings cuts. Investors focused on Fed uncertainty and potential rate cuts, keeping an eye on bonds.

Market reaction was influenced by Fed’s adjustments in economic projections. Investors saw the updates as reflecting current uncertainty, with dovish leanings. The S&P 500 lost momentum later in the day, signaling caution. The overall market outlook remains cautious due to growth, policy, budget, and tariff risks, despite recent improvements in risk/reward ratios.

Read more: Stocks Get Relief Rally in Best Fed Day Since July: Markets Wrap