Stock Market Today: Powell Speech Sparks Massive Stock Rally

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There was plenty for investors to focus on Wednesday, including a weaker-than-expected November ADP jobs report, a stubbornly high level of job openings and an upwardly revised reading on second-quarter gross domestic product (GDP). However, the main event was a mid-afternoon speech from Federal Reserve Chair Jerome Powell – and stocks reacted in a big way to what the head central banker had to say.

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During a speech at the Brookings Institution today, Powell said "the time for moderating the pace of rate increases may come as soon as the December meeting." However, he balanced this dovish tone by adding that "the path ahead for inflation remains highly uncertain," and that "history cautions strongly against prematurely loosening policy."

"Although much of Chair Powell's comments were benign and predictable, investors could be spooked with the Chair's admission that 'the path ahead for inflation remains highly uncertain,'" says Jeffrey Roach, chief economist for LPL Financial. "Overall, this speech will likely be bullish for the markets in the near term."

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And that was certainly the case today, with stocks moving notably higher in late-afternoon trading. The tech-heavy Nasdaq Composite, whose components are most sensitive to interest rates, surged 4.4% to 11,468, the broader S&P 500 Index added 3.1% to 4,080, and the blue-chip Dow Jones Industrial Average rose 2.2% to 34,589. All three indexes also closed higher for November, marking their second straight month of gains.

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Stocks weren't the only corner of the market seeing outsized gains today. U.S. crude futures jumped 3% to $80.55 per barrel after data showed domestic crude inventories plummeted last week. Specifically, the Energy Information Administration said this morning that crude inventories fell by 12.6 million barrels in the week ended Nov. 25, compared to the consensus estimate for a decline of 4.4 million barrels. This marked a third consecutive week of falling inventories.

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While the news sent oil futures to their highest close in over a week, they still finished the month down almost 7%. The volatility in the energy markets has made it harder for investors to find opportunities, but analysts believe these three names are some of the best oil stocks right now.

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.