US stocks ripped higher Friday after Federal Reserve Chair Jerome Powell opened the door to a September rate cut during his speech at Jackson Hole — a dovish turn that lit a fire under speculative trades from meme stocks to crypto.
“The baseline outlook and the shifting balance of risks may warrant adjusting our policy stance,” Powell said.
“Powell clearly opens the door for a September cut,” Oxford Economics chief US economist Ryan Sweet wrote in a note. “When Fed chairs open the door for a rate cut, it’s quite difficult to close.”
That expectation helped ignite a broad risk-on rally, with some of the market’s most volatile corners leading the charge.
Opendoor (OPEN), a debated Wall Street meme stock, surged nearly 40% as investors piled into housing-related names on expectations that lower borrowing costs could revive demand.
Crypto and crypto-linked equities also roared back. Ethereum (ETH-USD) spiked 14% as of Friday afternoon, outpacing a 4% gain in bitcoin (BTC-USD). Solana (SOL-USD) and XRP (XRP-USD) each rose around 10% and 7%, respectively.
That enthusiasm spilled into crypto-adjacent names as well: Coinbase (COIN) climbed over 6%, Robinhood (HOOD) added about 3%, and Strategy (MSTR) gained 6%.
The moves marked a sharp rebound after a bruising stretch for speculative assets, particularly as doubts mounted over the sustainability of the AI-fueled tech rally.
“Equity markets reacted very positively,” Scott Chronert, managing director of US equity strategy at Citi, wrote in a Friday note, highlighting the Russell 2000 (^RUT), a benchmark for small-cap stocks, had the most “striking surge” as investors shifted money into more economically sensitive names.
That broadening story, which captured Wall Street’s attention this week, was also evident with the equal-weighted S&P 500, which gives smaller companies the same influence as megacap tech, slightly leading the headline index.
That signals the rally is beginning to expand beyond the largest technology stocks that have dominated gains over the past two years.
Still, Chronert noted Friday, “there is some ‘junkiness’ to this initial reaction. Speculative/non-earners in growth sectors outperformed.” Speculative growth names, particularly unprofitable tech companies, have surged since the April market bottom.
Goldman Sachs’ Non-Profitable Tech Index, which tracks US-listed tech firms that have yet to generate positive GAAP earnings, jumped about 4% on Friday, extending its recent rebound. The index has climbed more than 65% off its spring lows and now sits just shy of recent highs.
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