Wall Street’s main indexes climbed more than 1% on Wednesday, driven by beaten-down growth and gains in financial stocks, as investors waited to see what the Federal Reserve would do at its policy meeting to reduce inflation. How high will it rise?
Ten of the 11 major S&P sectors advanced in early trading, with nine rising more than 1%. Leading the pack were consumer discretionary and financial, which grew 1.6% and 1.7%, respectively.
The energy sector was the only loser, down 0.5%.
Market heavyweights Apple Inc, Meta Platforms, Alphabet Inc, Microsoft Corp and Amazon.com Inc added between 1.3% and 2.5%.
According to the CME’s FedWatch tool, traders are almost entirely taking a 75 basis point increase from the Fed, up from 8.2% a week ago. Such a large hike would raise the Fed’s short-term target policy rate to a range of 1.5% and 1.75%.
The central bank will issue its statement at 2 p.m. ET (1800 GMT), with a press briefing expected by Fed Chair Jerome Powell at 2:30 p.m. ET.
Zach Hill, Head of Portfolio Strategy at Horizon said, “The Fed is going 75 basis points and trying to do very bullish talk to try to gain control of the narrative, and that’s when it’s all over. So investors will breathe a sigh of relief.” Investment.
“But the medium-term (market) outlook is that the Fed wants to tighten financial conditions and that means lower equity valuations.”
Worries about rising inflation, high borrowing costs and rising challenges to economic growth have rattled global equities this year.
The benchmark S&P 500 index on Monday plunged more than 20% from its record high on January 3, confirming that it has been in a bear market by the commonly used definition.
Data shows US retail sales unexpectedly fell 0.3% in May as motor vehicle purchases slumped amid a slump, and record high gasoline prices pulled spending from other goods.
Economists polled by Reuters had forecast retail sales to grow 0.2% last month.
At 9:44 am, the Dow Jones Industrial Average was up 315.84 points, or 1.04%, at 30,680.67, the S&P 500 was up 48.12 points, or 1.29%, at 3,783.60 and the Nasdaq Composite was up 179.38 points, or 1.66. %, at 11,007.73.
Goldman Sachs gained 2.4% to take the lead among the bigger banks.
Nucor Corp jumped 4.6% after forecasting current quarter profits on strong steel demand.
Boeing Co. rose 4.7% this week after China Southern Airlines Co Ltd conducted test flights with a 737 MAX aircraft for the first time since March, in a sign the jet’s return to China could be as demand rebound.
The number of issues issued declined by a 5.79-to-1 ratio on the NYSE and a 3.81-to-1 ratio on the Nasdaq.
The S&P index recorded a new 52-week high and 30 new lows, while the Nasdaq recorded seven new highs and 77 new lows.
This story has been published without modification in text from a wire agency feed.