NEW YORK: US stocks ended solidly higher on Tuesday (Jan 10), led by a 1 per cent gain in the Nasdaq, on relief that Federal Reserve Chair Jerome Powell refrained in a speech from commenting on rate policy.
In his first public appearance of the year, Powell said at a forum sponsored by the Swedish central bank that the Fed’s independence is essential for it to battle inflation.
Recent comments by other Fed officials have supported the view that the central bank needs to remain aggressive in raising interest rates to control inflation. Fed Governor Michelle Bowman said on Tuesday the bank will have to raise interest rates further to combat high inflation.
“Everybody hangs on every word from the Fed,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. Powell “didn’t really say anything” about policy, he added.
Investors anxiously awaited the US consumer prices index report Thursday, which is expected to show some moderation in year-on-year prices in December.
Traders are betting on a 25-basis point rate hike at the Fed’s upcoming policy meeting in February.
“There are some indications that inflation is slowing significantly. What investors are really looking for is a gap down in major inflation data that could probably get the Fed’s attention,” Ghriskey said.
Amazon.com shares rose 2.9 per cent and gave the Nasdaq and S&P 500 their biggest boosts.
The Dow Jones Industrial Average rose 186.45 points, or 0.56 per cent, to 33,704.1; the S&P 500 gained 27.16 points, or 0.70 per cent, at 3,919.25; and the Nasdaq Composite added 106.98 points, or 1.01 per cent, at 10,742.63.
Shares of Microsoft Corp rose 0.8 per cent, a day after Semafor, citing people familiar with the matter, reported that the tech company was in talks to invest US$10 billion in ChatGPT-owner OpenAI.
Communications services was the day’s best-performing sector, while energy rose along with oil prices.
This week marks the start of the fourth-quarter earnings season for S&P 500 companies, with results from several of Wall Street’s biggest banks due later this week.
Shares of investment bank Jefferies Financial Group rose 3.8 per cent on Tuesday, a day after it posted its second-best year for investment banking revenue. It also reported a 52.5 per cent slump in fourth-quarter profit.
For all the latest business News Click Here
