US open: Stocks turn positive as Powell paves the way for rate cuts

Wall Street stocks turned positive following Federal Reserve chair Jerome Powell's testimony to the House Financial Services Committee.

As of 1530 BST, the Dow Jones Industrial Average was up 0.51% at 26,920.15, while the S&P 500 was ahead 0.49% at 2,994.22 and the Nasdaq-100 traded 0.66% firmer at 8,195.68.

The Dow opened 136.66 points higher on Wednesday, while the S&P 500 briefly broke above 3,000 for the first time in history, as investors digested the key testimony from Powell.

Early on Tuesday, Powell delivered the opening remarks at a Boston Fed conference but, as anticipated, made no references to monetary policy ahead of the semi-annual testimony to the House Financial Services Committee.

But Wednesday was a different story, Powell signalled that the door was wide open to policy easing, telling lawmakers that there were increased risks bearing down on the US economy from overseas even as price pressures remained muted.

In his semiannual Monetary Policy Report to Congress, Powell said global crosscurrents related to global growth and trade had reemerged since policymakers met in May, with apparent progress on trade having since turned into greater uncertainty and with the central bank's contacts in business and agriculture reporting heightened concerns over trade developments.

"Since [the May policy meeting], based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the US economic outlook. Inflation pressures remain muted," he said.

"And there is a risk that weak inflation will be even more persistent than we currently anticipate."

Overnight, Atlanta Fed president Raphael Bostic said the Fed was debating the pros and cons of allowing the world's largest economy to run "a little hotter".

Elsewhere, Kansas City Fed president Esther George said US inflation was unlikely to surge anytime soon, but noted that keeping interest rates too low for too long could put financial stability at risk.

Elsewhere, Donald Trump took to Twitter on Wednesday, claiming that Iran was in violation of the "terrible" $150bn deal made by John Kerry during the Obama administration, accusing it of secretly "enriching".

"Iran has long been secretly 'enriching', in total violation of the terrible $150bn deal made by John Kerry and the Obama Administration. Remember, that deal was to expire in a short number of years," said the President.

Trump then went on to state that sanctions would soon be increased, "substantially".

In corporate news, Amazon shares rose 1.2% in early trade, topping out at more than $2,000 per share, while FedEx shares picked up 1.11% after analysts at Goldman Sachs added the group to its 'conviction buy' list.