Wall Street’s main indexes rose in early trade on Thursday, supported by banks and megacap growth stocks, while the focus was on the Federal Reserve’s annual Jackson Hole symposium for clues on the central bank’s monetary policy outlook.
Wall Street broke its three-day losing streak on Wednesday, boosted by strong gains in energy stocks, but closed the session from intraday highs as markets remained cautious on concerns the Fed was about to slow global growth. Amid growing concerns about how it plans to curb inflation.
“People are slowly coming back to the market with the assumption that a lot of bad news has already arrived,” said Brian Wendig, president of MJP Wealth Advisors.
Chair Jerome Powell’s speech, due on Friday, will be examined for any indication that an economic slowdown could alter the Fed’s strategy and if the central bank can achieve a “soft landing” for the economy.
“Investors are really curious to know whether the Fed is going to be blind to raising interest rates and fighting inflation at the expense of economic growth,” Wendig said.
Data earlier in the day showed the US economy contracted at a moderate pace in the second quarter than initially thought as consumer spending blurred some of the drag from the slowing pace of inventory accumulation, allaying fears that There was a recession.
Traders see a slightly higher chance of a 75 basis-point increase from the Fed at its policy meeting next month, compared to a smaller 50 basis-point increase.
Kansas City Fed Chair Esther George said it was too early to predict how much the US central bank would raise interest rates next month, with major reports on inflation and the labor market still to come.
Investors will seek details of the Fed’s plan to shrink its nearly $9 trillion balance sheet, a process that began in June.
Most high-growth and technology stocks rose in early trading, with Apple Inc and Alphabet Inc each rising more than 1%.
Electric vehicle maker Tesla Inc. slipped 0.3% after its 3-for-1 stock split took effect.
Nine of the 11 major S&P 500 sectors advanced on Thursday, with gains in physical stocks.
Energy stocks rose for the third straight session as crude oil prices extended their rally on concerns of rising supply tightness.
At 9:55 am, the Dow Jones Industrial Average was up 54.40 points, or 0.16%, at 33,023.63, the S&P 500 was up 22.31 points, or 0.54%, at 4,163.08 and the Nasdaq Composite was up 78.72 points, or 0.63. %, at 12,510.24.
The big banks were up 1% in early trade, with Citigroup and Morgan Stanley leading the way.
Weighing in on the blue-chip Dow, Salesforce Inc. slipped 7.4% as it cut its annual revenue and profit forecast on a hit from “measured” spending from customers and a stronger dollar.
Helped by better results from Corporate America, the S&P 500 has recovered about 13% from its bear market low in mid-June.
According to strategists recently surveyed by Reuters, the benchmark index is set to end the year slightly above its current levels.
Graphics chip designer Nvidia Corp slipped 0.8% after forecasting a sharp drop in revenue for the current quarter on the back of a weak gaming industry.
However, semiconductor stocks rose 1.5 per cent.
President Joe Biden will sign an executive order on the implementation of the $52.7 billion semiconductor chips manufacturing subsidy and research law, the White House said.
Advancing declining issues compared to a 3.08-to-1 ratio on the NYSE and a 2.06-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and 29 new lows, while the Nasdaq recorded 29 new highs and 29 new lows.
This story has been published without modification in text from a wire agency feed.
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