Market Optimism Builds on Powell's suggestion of potential rate cuts
#274 Latest Insights on US Indices and Key Trends in various Top 20 US Stocks
Introduction
Last Friday, investors reacted positively to the speech Federal Reserve Chair Jerome Powell delivered at his annual meeting regarding possible rate cuts in September 2025. In his speech, he emphasized that the decision will depend on key employment and inflation data to be released in early September. As a response, the U.S. indices Futures surged.
Research from the National Bureau of Economic Research (NBER.org) has shown that financial markets tend to react positively to the announcement of rate cuts, especially when they are not made in response to a recession. These responses often last only a short time before the rate cut, and when the actual rate cut happens, it's usually already been factored in.
Following the 60-year cycle, it appeared to me that the interest rates in 1965 were on a similar level, 4%-4.5% compared with today’s interest rates. The Fed did not make a rate cut in 1965, but actually made a rate hike in December 1965. (Follow link to Federal Reserve Bulletin December 1965, on page 1669)
So, I wonder whether we will see an earlier rate cut this year in September, rather than following the 60-year cycle, and the potential phase shift we saw in the February-May period this year. This could confirm my theory that the 60-year cycle indeed made a phase shift to the left. I have updated my 60-year phase shift chart on the DJIA in today’s post.
In an earlier post this year, I showed premium subscribers that the stock market fear over President Trump's tariff announcement occurred a couple of months earlier than his predecessor did in May 1965.
Since April 7th, 2025, we have seen the 60-year cycle in a pattern similar to 1965, and if it continues, as of today, we might reach the $49,000 to $50,000 range on the DJIA by year's end or close to it.
Further in this post, I have updated the 60-year Gann Master Cycle Chart, and last week’s dominant cycle charts on the US Indices and the US Top-20 stocks that recently experienced Key bearish or bullish reversals or hit a planetary support or resistance level.