The stock market hit a new high in its decade-long rally on Wednesday, as the benchmark S&P 500 stock index traded above 3,000 for the first time.
Investors cheered the potential for an interest-rate cut, which would make stocks more appealing. In prepared testimony before Congress on Wednesday, Jerome H. Powell, the Federal Reserve chair, raised concerns about a global slowdown hurting the United States, laying the groundwork for a cut later this month.
The weak outlook for growth is partly a result of the trade war, which the central bank recently said could discourage business spending and may be contributing to a manufacturing slowdown. That also has the potential to hurt the stock market should it turn out to be worse than anticipated, or if the Fed’s policy moves aren’t enough to offset the slump.
But right now, stocks are in a sweet spot as the economy and corporate profits continue to grow and borrowing costs seem likely to come down.