Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium marked a significant turning point for the U.S. stock market. Powell declared that “the time has come” for the Fed to begin cutting interest rates, signaling a shift in the central bank’s policy stance. This announcement led to a broad rally across Wall Street, with the S&P 500 rising 1.2%, the Dow Jones Industrial Average adding 1.1%, and the Nasdaq Composite gaining 1.5%.

The speech came as the Fed is poised to reduce its main interest rate for the first time since 2020. Powell emphasized that the direction of travel is clear, with the timing and pace of rate cuts dependent on incoming data and the evolving economic outlook. This move is seen as a response to recent economic data indicating a slowdown in the labor market and a cooling of inflation, which has fallen to 2.5% from a peak of 7.1% two years ago.

The real estate sector led the S&P 500 higher, with the SPDR Real Estate ETF (XLRE) gaining 1.9% following Powell’s speech. This sector has been particularly impacted by the potential for lower interest rates, which could boost property values and reduce vacancy rates. The broader market also saw gains in technology stocks, with Nvidia leading the charge, up 4% as investors look forward to its upcoming earnings report.

Overall, Powell’s speech has injected optimism into the market, with investors anticipating a potential rate cut in September. This move is expected to support economic growth and maintain a strong labor market, potentially boosting the economy and supporting Vice President Kamala Harris’ presidential campaign.