The S&P 500 pushed further into record territory last week on hints the Federal Reserve plans to take a more aggressive approach to economic growth than it has in the past.

At the virtual Jackson Hole Economic Policy Symposium on Thursday, Fed Chair Jerome Powell outlined the Federal Reserve’s new “average inflation targeting” policy. Powell said the central bank plans to allow inflation to rise “moderately” above its historical 2{5667a53774e7bc9e4190cccc01624aae270829869c681dac1da167613dca7d05} target for “some time” to make up for time it has spent below that target level.

“What Powell is saying is even if you start to see inflation pick up, don’t assume that that means we’re going to tighten policy in response,” said Shawn Cruz, manager of trader strategy at TD Ameritrade. 

“His outlook for the economy isn’t great, he’s not confident in the Fed’s ability to influence the things the Fed would like to influence, and he’s definitely moving away from traditional monetary policy rules that were born out of experiences by central banks in the second half of the 20th century.”

On Monday, S&P Dow Jones Indices announced major changes to the popular Dow Jones Industrial Average, replacing Dow components Exxon Mobil, Pfizer and Raytheon Technologies with, Amgen and Honeywell. The shakeup comes in response to Apple’s four-for-one stock split that took place on Monday, which would have significantly reduced the Dow’s technology sector weighting.

On Thursday, Abbott Laboratories shares gained nearly 8{5667a53774e7bc9e4190cccc01624aae270829869c681dac1da167613dca7d05} after President Donald Trump said the U.S. has agreed to purchase 150 million of the company’s rapid COVID-19 tests for $750 million. The portable tests will reportedly cost just $5 each and produce results in only 15 minutes.

On Wednesday, data analytics company Palantir filed to go public via a direct listing, an alternative route to a standard initial public offering. Palantir is reportedly targeting a $26 billion valuation, but the company generated a $588 million loss in 2019. 

Earnings Season Winds Down shares gained more than 28{5667a53774e7bc9e4190cccc01624aae270829869c681dac1da167613dca7d05} on the week thanks to blowout second-quarter earnings that included 29{5667a53774e7bc9e4190cccc01624aae270829869c681dac1da167613dca7d05} revenue growth compared to a year ago.

This week, investors will be watching for earnings reports from Macy’s on Wednesday and Broadcom, Campbell Soup and Michaels on Thursday.

The utilities sector has reported the highest earnings growth of any S&P 500 market sector in the second quarter at 9{5667a53774e7bc9e4190cccc01624aae270829869c681dac1da167613dca7d05}, according to FactSet.

Economic Numbers

This week’s key economic updates come on Thursday when Eurostat releases its monthly Eurozone retail sales report for July and Friday when the Labor Department releases its monthly US jobs report for August.

Benzinga is a financial news and data company headquartered in Detroit.

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