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Powell’s dovish message boosted stocks


The Nasdaq and S&P 500 indexes closed higher and hit roughly five-month highs on Thursday (Feb. 2), as a more dovish-than-expected message from Fed Chairman Jerome Powell boosted stocks and Meta Platforms shares surged on tight cost controls.

The S&P 500 rose 1.47% to 4,179.76, its highest level since August. Meanwhile, the technology-focused Nasdaq Composite Index rose 3.25% to 12,200.82, its highest level since September. The Dow Jones Industrial Average underperformed, falling 39.02 points, or 0.11%, to 34,053.94.

On Wednesday, investors are still digesting the Fed’s policy decision and comments from Powell, who acknowledged progress in fighting inflation and seemed reluctant to stop the rally in stocks and bonds.

Data showed that initial jobless claims fell to a nine-month low last week, underscoring the resilience of the labor market, with monthly employment data due out Friday.

The 50-day moving average of the S&P 500 broke above its 200-day moving average, a pattern known as a “golden cross” that many see as a bullish technical signal for near-term momentum. The energy sector was one of the top performers last year, down 2.5%, while the healthcare sector was down 0.7%.

Main Pairs Movement

The greenback, in terms of the USD Index, adds to the weekly leg lower and breaks below the 101.00 support to print new 10-month lows on Thursday. However, the price started to return to the north during the Asia trading session. At the time of writing, trading at 101.73.

EUR/USD pair is displaying a back-and-forth action around 1.0900 after a pullback move from 1.0885 in the early Asian session. The major currency pair has turned sideways ahead of the United States Nonfarm Payrolls data, which will release on Friday. At the time of writing, trading at 1.8993.

GBP/USD sees a further downside to near 1.2200 as anxiety soars ahead of US NFP. At the time of writing, trading at 1.22160.

Gold price nosedived to near 1,912.00 after a blockbuster recovery move from the DXY on Thursday. The precious metal is staring at the round-level resistance of 1,900.00 as further downside looks possible ahead of the NFP data. At the time of writing, trading at 1916.40

Economic Data

CurrencyDataTime (GMT + 8)Forecast
GBPComposite PMI (Jan)17:3047.8
GBPServices PMI (Jan)17:3048
USDNonfarm Payrolls (Jan)21:30223K
USDUnemployment Rate (Jan)21:303.50%
USDISM Non-Manufacturing PMI (Jan)23:0049.2