At closing bell, the Dow Jones Industrial Average index inclined 160.35 points, or 0.57%, to 28,492.27. The S&P 500 index added 5.82 points, or 0.17%, to 3,484.55. The tech-heavy Nasdaq Composite Index fell 39.72 points, or 0.34%, to 11,625.34.
The mixed close by the major averages came after Federal Reserve Chair Jerome Powell announced a widely expected shift with regard to the price-stability side of the central bank's dual mandate. The Federal Reserve announced a major policy shift in a highly anticipated speech on Thursday, to a "flexible form of average inflation targeting." in order to support the labor market and broader economy. Chairman Jerome Powell called the move robust updating of Fed policy. That means it will allow inflation to run moderately above the Fed's 2% goal for some time following periods when it has run below that objective. The Fed chief stressed that the longer-run goal continues to be an inflation rate of 2% but noted inflation will average less than that if it runs below 2% following economic downturns and never moves above that level even when the economy is strong.
"Households and businesses will come to expect this result, meaning that inflation expectations would tend to move below our inflation goal and pull realized inflation down," Powell said. He added, "To prevent this outcome and the adverse dynamics that could ensue, our new statement indicates that we will seek to achieve inflation that averages 2% over time." Powell said appropriate monetary policy will therefore likely aim to achieve inflation moderately above 2% following periods when inflation has been running below that level. "In seeking to achieve inflation that averages 2% over time, we are not tying ourselves to a particular mathematical formula that defines the average," Powell said. "Thus, our approach could be viewed as a flexible form of average inflation targeting."
Economically-sensitive financials jumped the most among the 11 major S&P sectors while tech-focused sectors eased.
Boeing Co rose 5% after the European Union Aviation Safety Agency (EASA) announced plans to begin flight tests of its 737 MAX plane, a move viewed as a key milestone toward its return to service.
Abbott Laboratories surged 7.8% after the medical device maker won U.S. marketing authorization for a $5 rapid COVID-19 portable antigen test.
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ECONOMIC NEWS: US Q2 GDP Plummets 31.7%, Biggest Contraction On Record- US real gross domestic product plummeted by 31.7% in the second quarter compared to the previously reported 32.9% nosedive, according to a report released by the Commerce Department. Despite the revision, the steep drop in GDP in the second quarter still represented the biggest economic contraction on record. The Commerce Department said the smaller than previously estimated drop in GDP came as private inventory investment and consumer spending decreased less than previously estimated.
US Weekly Jobless Claims Stay Above 1 Million- US initial jobless claims dropped to 1.006 million in the week ended August 22nd, a decrease of 98,000 from the previous week's revised level of 1.104 million, the Labor Department reported on Thursday. The Labor Department said the less volatile four-week moving average also fell to 1,068,000, a decrease of 107,250 from the previous week's revised average of 1,175,250.
US Pending Home Sales Jump Sharply In July- US pending home sales spiked by 5.9% to 122.1 in July after soaring by 15.8% to 115.3 in June, the National Association of Realtors revealed in a report on Thursday. Pending home sales increased for the third straight month after plummeting in March and April and are now up by 15.5% compared to the same month a year ago. A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
Among Indian ADR, INFOSYS declined 0.78% to $10.68, Vedanta fell 1.15% to $6.88, HDFC Bank dropped 0.62% to $49.41, and Dr Reddys Labs shed 0.25% to $59.70. Azure Power Global added 8.5% to $24.89, WNS Holdings rose 0.69% to $66.77, ICICI Bank was up 1.42% to $10.68, and Wipro rose 0.71% to $4.26. Tata Motors ended steady at $9.65.
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