Don’t look now, but U.S. stocks are on fire again. Optimism returned to Wall Street in a big way this week after Federal Reserve Chair Janet Yellen said monetary policy will change in a “slow, gradual, predictable way.”
In her semi-annual testimony before Congress, Yellen expressed concern over weak inflation and urged caution with respect to interest rates. She also downplayed previous comments about the financial system being crisis proof “in our lifetime,” and instead remarked on the Fed’s solid stress-testing regime.
Yellen testified before the House Financial Services Committee on Wednesday and Senate Banking Committee on Thursday. Day one remarks were widely read as dovish, signaling that a slow-go Fed will continue to support the economy with easy policy.
A dearth of high-profile U.S. data releases kept investors focused on upcoming earnings, which will flood the market over the next month. Market participants are expecting another solid quarter of year-over-year growth, a sign that Wall Street has emerged from its so-called profit recession.
To compare this week’s trends with the previous week’s, check out: The Market Wrap for July 7.
Stocks finished mostly higher in early week trading, as technology and materials sectors drew bidders in a session marked by low volatility. The large-cap S&P 500 Index edged up 0.1% to close at 2,427.43. The Nasdaq Composite Index added 0.4% to land at 6,176.40. The blue-chip Dow Jones Industrial Average pared gains to finish flat at 21,408.52.