- US stocks had their best day since January.
- Airline stocks are taking off.
- Tourists are shopping less at Tiffany.
- US dollar slides to 3-week low.
- Jerome Powell says Fed will 'act as appropriate' to sustain economic growth.
Tuesday trading is over and it ended with a bang. All major US stock indexes recorded their best one-day percentage gain since January 4.
Now investors are turning their attention to what’s next.
His comments followed remarks from St. Louis Fed President James Bullard, who said Monday that risks to economic growth posed by trade and weak inflation could warrant an interest rate cut soon.
Warren named the strong dollar one of the most important factors in the US trade deficit, and blamed it for weak exports.
President Donald Trump holds similar beliefs. Last year, he called China and the European Union, among others, currency manipulators who were devaluing the yuan and the euro. The US Treasury refrained from officially giving them that label.
A weaker currency makes a country's goods cheaper on the global market.
The dollar is a free floating currency, unlike the Chinese yuan, for example, which only fluctuates in a defined range. Turning the buck into a managed currency would be a huge change.
The ICE US Dollar Index, which measures the greenback against six rivals, rose more than 4% last year, according to Refinitiv. It was driven higher by the Federal Reserve's continuous interest rate increases, as well as the belief that in a full-blown trade war, the US economy would be the least badly hit versus its peers. Indeed, during some of the trade war flare-ups, the dollar has proven to be a kind of safe haven for investors. This is also in part thanks to the strength of the US economy.
In 2019, the index is up 0.9% so far. For reference, back in 2017, it dropped some 10%.
US markets are making a turnaround after the Federal Reserve indicated that it would keep the expansion going however possible.
If May is any indication, it might be a strong travel season for US airlines.
Powell outlined three future challenges for the Fed, including its existing monetary policy strategy given the underperformance of inflation data, the central bank's toolkit, as well as its communication with the public.
Stocks are holding on to their gains after Powell's speech, with the Dow up 1%, or 246 points, the S&P 500 up 0.8% and the Nasdaq Composite up 0.9%.
Earlier, Federal Reserve Chairman Jerome Powell said that the central bank was monitoring matters of trade closely and would act "as appropriate" to sustain economic growth in the United States.
US Stocks started the day stronger on Tuesday, climbing across the board as investors set aside worries about the ongoing trade war.
The tech-heavy Nasdaq Composite started the day higher — recovering a bit after it fell 1.6% Monday. Investors were worried about a possible regulatory crackdown on big tech.