Jan 10 (Reuters) – Wall Street’s main indexes rose on Tuesday as Federal Reserve Chairman Jerome Powell refrained from commenting on the outlook for monetary policy, with the focus on an upcoming inflation reading scheduled for later this week.
Powell’s comments, which offered no indication of the Fed’s future tightening plans, came as a welcome relief after two other policymakers on Monday issued cautious notes on the interest rate outlook.
“He (Powell) has not disrupted the market in any way, and the fact that he emphasized the importance of political freedom in addressing inflation is a positive for the market,” said Peter Cardillo, chief market economist at Spartan Capital Securities. new york.
Traders are betting on a 25-basis-point hike ahead of the U.S. central bank’s policy meeting in February, with the terminal rate seen below 5 percent in June.
Markets had hoped the Fed would soon end its rate hike cycle following recent signs of a US economic slowdown, although policymakers are signaling the central bank’s priority to control inflation.
“The Fed has a little more tightening to do,” said David Russell, vice president of market intelligence at TradeStation Group, adding that Thursday’s inflation report will be critical in shaping interest rates.
The much-anticipated Consumer Price Index (CPI) report from the US Department of Labor is expected to show a moderate year-over-year increase in prices in December.
The Fed’s aggressive monetary policy aimed at curbing high inflation in US stocks by 2022 sent the three major indexes to their biggest annual decline since 2008.
Fed Governor Michelle Bowman said on Tuesday that the US central bank will need to raise interest rates further to combat high inflation.
Among the major sectors of the S & P 500, retailers (.SPXRT) were in the lead with 0.8% and consumer discretionary shares (.SPLRCD) rose 0.2%, Amazon.com Inc (AMZN.O) gained in both sub-indices.
Healthcare stocks (.SPXHC) rose 0.5% and were also a big boost to the benchmark S&P 500 index.
At 11:59 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 28.41 points, or 0.08%, at 33,546.06, the S&P 500 (.SPX) was up 2.71 points, or 0.07%, at 3,894.80, and the Nasdaq and . Composite (.IXIC) was up 17.25 points, or 0.16%, at 10,652.90.
Broadcom Inc ( AVGO.O ) fell 3.4 percent on reports that Apple Inc ( AAPL.O ) plans to replace Broadcom chips with in-house designs by 2025.
Issuers outperformed rivals by a 1.17-to-1 ratio on the NYSE and a 1.62-to-1 ratio on the Nasdaq.
The S&P index hit one new 52-week high and no new lows, while the Nasdaq hit 37 new highs and 20 new lows.
Reporting by Ankika Biswas, Amruta Khandekar and Johan M. Cherian in Bengaluru; Editing by Shinjini Ganguli and Shounak Dasgupta
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