Markets Mixed As Fed Takes Aim At Unemployment

The Fed's new strategy sent Treasury yields higher, which gave a lift to interest rate-sensitive financials.

"The steepening of the yield curve is a welcome addition, particularly on a day where the market is rising," said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.

The financial sector provided the biggest boost to the S&P 500 and the Dow, pushing the former to its fifth straight record closing high and the latter within a hair's breadth of reclaiming positive territory for the year so far.

The Dow remains more than 3.6 percent below its record high reached in February.

Stocks lost steam late in the session following House of Representatives Speaker Nancy Pelosi issued a statement saying Democrats and Republicans remain far apart over the next stimulus bill.

Declines in market-leading momentum stocks capped gains in the S&P and Dow and held the Nasdaq in the red.

Economic recovery was forefront in Fed Chairman Jerome Powell's remarks made as part of the Kansas City Fed's virtual Jackson Hole symposium. In the speech Powell outlined the central bank's aggressive new strategy to support the economy by lifting inflation and returning the economy to full employment.

"The statement by Powell in some regards is telegraphing a continued dovish stance for quite some time," Keator said.

But with last week's initial jobless claims stubbornly hovering above the 1 million mark, according to the Labour Department, a return to full employment currently appears to be a long haul.

The Dow Jones Industrial Average rose 0.57 percent to 28,492, the S&P 500 gained 0.17 percent, to 3,485 and the Nasdaq Composite dropped 0.34 percent, to 11,625.

Of the 11 major sectors in the S&P 500, financials enjoyed the biggest percentage gain while communications services, weighed down by Netflix and Facebook, lagged.

Shares of Walmart and Microsoft rose 4.5 percent and 2.5 percent, respectively after announcing a joint bid for TikTok's US assets. (Reuters)