Wall Street has risen, says Fed’s Powell, rate hike on track

In prepared remarks for his testimony to the US House of Representatives Financial Services Committee, Powell reiterated the main Fed narrative that high inflation and an “extremely tight” labor market guarantee higher interest rates.

Powell will testify before US lawmakers at 10 a.m. ET (1500 GMT).

“It’s as expected,” said Thomas Hayes, managing member of Great Hill Capital LLC in New York.

“If anything, I thought he was relaxed and calm about the realities of geopolitical risks and that the Fed would be nimble and effectively tactical about how they proceed and take everything into account versus Just go ahead with some predetermined plan.”

Traders now see a 5% chance of a 50 basis point rate hike and a 95% chance of a 25 basis point hike by the Fed in its March meeting.

All 11 major S&P sectors advanced in early trade with a financial return of 1.2% after falling sharply so far this week. After hitting its lowest level since September 2021 in the previous session, the bank index climbed 1.4%.

Brent crude rose to an eight-year high after Western sanctions disrupted transportation of goods exported by Russia, with energy stocks resuming their march, up 1.8%.

Wall Street indexes closed sharply lower on Tuesday, with financial stocks hurting heavily as investors weighed the impact of harsh sanctions against Russia over Ukraine’s invasion.

“This market is facing two important tests right now: one is the Federal Reserve and how will they address inflation and the other is the war in Eastern Europe, and when we think about those two things, they are intertwined. Art Hogan, chief market strategist at National Securities.

Meanwhile, data showed US private employers hired more workers than expected in February as labor market reforms gathered steam.

Russia said its forces captured the first major city, capturing Kherson in southern Ukraine, as fighting raged across the country. The Kremlin said its delegation was ready for a second round of talks with Ukraine.

At 9:39 am, the Dow Jones Industrial Average was up 193.12 points, or 0.58%, at 33,488.07, the S&P 500 was up 24.34 points, or 0.57%, at 4,330.60 and the Nasdaq Composite was up 40.26 points, or 0.30. %, at 13,572.72.

Among other stocks, Nordstrom Inc. rose 31.5% following the department store chain’s forecast for full-year revenue and profit.

Advancing issues declined from a 2.33-to-1 ratio on the NYSE and 1.55-to-1 on the Nasdaq.

The S&P index recorded nine new 52-week highs and two new lows, while the Nasdaq recorded 14 new highs and 43 new lows.

This story has been published without modification in text from a wire agency feed. Only the title has been changed.