In his semiannual Senate testimony on the state of the U.S. economy this morning Federal Reserve chair Jerome Powell gave the U.S. economy a strong thumbs up–at least if the tariff war doesn’t hit the global economy too badly. (Powell completed his testimony tomorrow in front of the House of Representatives.)
The fundamentals of U.S. economic growth look solid, Powell said. Unemployment is near an 18-year low. Inflation is near the Fed’s 2% target so the central bank doesn’t need to accelerate its schedule for interest rate increases.
That was enough to calm a market that was a bit unsettled by yesterday’s earnings report from Netflix (NFLX) after the market close. The company cut its guidance for the third quarter on earnings per share, revenue, and subscriber growth and that was enough to knock 14.27% off the shares in after-hours trading.
Today, though, the damage from Netflix was limited to Netflix and even there the market wasn’t nearly as negative today as yesterday. Shares of Netflix recovered about two-thirds of yesterday’s drop, closing down 5.24%.
Stocks as a whole rose with the Standard & Poor’s 500 stock index closing up 0.40%. The Dow Jones Industrial Average was up 0.23%. And the NASDAQ Composite gained 0.63% as investors returned to their search for big earnings gains in the technology sector during earnings reports over the next couple of weeks.