Nasdaq 100 Surges 1.5% Toward Record High as Powell Signals Potential Rate Cuts

Federal Reserve Chair Jerome Powell's congressional testimony has reshaped market expectations, signaling potential rate cuts "sooner rather than later" if inflation remains contained or labor markets weaken. The dovish shift sent two-year Treasury yields tumbling as traders now fully price in two Fed cuts by year-end, with July odds jumping to 20%.

Risk assets rallied broadly following Powell's remarks and a surprise Middle East ceasefire brokered by former President Trump. The Nasdaq 100 led gains, climbing 1.5% toward record territory as liquidity-sensitive assets benefited from the changing rate outlook.

While Powell emphasized data dependence, his acknowledgment of potential preemptive action marks a notable evolution in Fed communication. The central bank appears poised to pivot from its restrictive stance despite robust economic growth, reflecting heightened sensitivity to downside risks.