"Will fuel stock rally": Fed gives Wall Street tailwind

The US Federal Reserve has achieved more leeway with its inflation target. The historic decision has left its mark on US investors. But not all indices benefit.

The prospect of a longer period of low interest rates in the US has briefly fueled the record hunt on the US stock markets. The broader one S&P 500 and the index of the technology exchange Nasdaq set new records after a speech by Fed Chairman Jerome Powell. In the end, the S&P 500, which for the first time in its history had surpassed the record of 3500 points during the day, improved by 0.17 percent to 3485 points. The Nasdaq 100 set the next record early on. For the first time above the mark of 12,000 points, he quickly ran out of breath. In the end, it gave way by 0.38 percent to 11,926 points. Of the Dow Jones Index gained 0.6 percent to 28,492 points.

Powell is changing its monetary policy strategy in the middle of the corona and economic crisis with a stronger focus on the labor market and a more flexible inflation target. This means that the money locks could remain wide open even during the upswing. "The US Federal Reserve will keep interest rates near zero for the foreseeable future, possibly for more than five years, it will be more relaxed about inflation and even advocate a modest rise above its target of two percent," said Nigel Green , Head of the asset manager deVere Group. "That will further fuel the stock rally."

Dax and EuroStoxx were meanwhile unimpressed and traded weaker. The leading German index lost 0.7 percent 13.096 points. The US dollar suffered only initially from lower interest rate expectations and quickly regained the upper hand. Of the Euro rose to just under $ 1.19, then crumbled to $ 1.18, below the level before Powell's speech.

You can read about the details of the day on the Frankfurt trading floor in our Stock Exchange Day.

Powell did not disappoint, but expectations were very high beforehand, said currency strategist David Iusow from the broker DailyFX. Some market participants are of the opinion that the new approach leads to more uncertainty instead of transparency, said market analyst Fawad Razaqzada from the broker ThinkMarkets. "Markets don't usually like uncertainty." Nonetheless, the prospect of an ultra-loose monetary policy could soon put the dollar under pressure again.

Cyclone shakes up the oil market somewhat

It was less popular, especially in times of crisis gold: Despite the prospect of a long period of low interest rates in the US, investors cashed in after the sharp rise the day before. The troy ounce (31.1 grams) fell 1.2 percent in price to 1,930 US dollars. In the immediate reaction to Powell's speech, however, the price of the precious metal had shot up to the daily high of 1,977.

"Powell basically said it was an inflation target in name only, and that attracted sellers," said Tom di Galoma, managing director of wealth manager Seaport Global Holdings. "The institutions believe that the Fed will keep rates low longer and that the Fed Funds rate will not move at all."

At the Oil market the hurricane "Laura" caused a stir. The hurricane hit the Louisiana coast. Oil refineries had to stop production. A barrel of US WTI light oil fell 0.9 percent to $ 42.98. European Brent crude lost 1.2 percent to $ 45.07.

The individual values ​​stood out Tiffany with an interim increase of 1.9 percent. The US jewelry chain suffered a decline in profits in the Corona crisis, but it was less than feared. The approval of a corona rapid test came from the shareholders of the US medical equipment manufacturer Abbott good at. The shares soared seven percent during the day. The US pharmaceuticals regulator FDA gave the go-ahead for the use of a rapid test in the US that can indicate a corona infection within 15 minutes. Shares of Coty lost more than eight percent. The corona pandemic hit the US cosmetics company hard. Sales collapsed by 56 percent between April and June.

Walmart is meanwhile in talks with Microsoft joined the company to jointly endeavor to purchase the US business of the Chinese platform TikTok. The partnership between the two US companies will take into account the concerns of the US government, said the trading giant. The government had raised security concerns and called for the sale of the TikTok business in the United States. Walmart rose 4.5 percent and led the Dow, Microsoft rose 2.5 percent.