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The Market Wrap for February 1: Powell to the Rescue

One of the common themes over the last few weeks has been uncertainty. Uncertainty surrounding global growth. Uncertainty surrounding the Federal Reserve and uncertainty surrounding the trade war. All of these items have put tons of pressure on the markets and have produced some big swings – including this week, as the market started off on a dour note.

However, by the end of the trading week, three of these points are now known.

For starters, the Federal Reserve decided to pause its rate hikes. With Jerome Powell switching to a dovish tone, investors expect the Fed to accommodate the near future. At the same time, there have been reports that the trade war could be coming to an end as top officials from both China and the U.S. have agreed to talk. Finally, the long government shutdown finished, and it’s now back to work.

These bullish points allowed the markets to climb during the back half of the week and overshadow some of the poor data, earnings and guidance released during the first few days of trading.

All in all, as they say, “don’t fight the Fed.” And that’s just what investors did over the week.

Be sure to check out our previous Wrap here, when the critical earnings season remained mixed.

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