Wall Street rises as Fed’s Powell avoids monetary policy outlook

  • Broadcom stumbles upon report of Apple’s plan to replace chip
  • Indices up: Dow 0.08%, S&P 0.07%, Nasdaq 0.16%

Jan 10 (Reuters) – Major Wall Street indexes rose on Tuesday as Federal Reserve Chairman Jerome Powell avoided commenting on the outlook for monetary policy, with focus on an upcoming inflation reading scheduled for later this week.

Powell’s remarks, which offered no hint at the Fed’s future tightening plans, came as a major relief after two other policymakers issued a note of caution on the interest rate outlook on Monday.

“He (Powell) hasn’t disrupted the market in any way and his insistence on the need for political independence while fighting inflation is a definite plus for the markets,” Peter said. Cardillo, chief economist at Spartan Capital Securities, New York.

Traders clung to bets of a 25 basis point rate hike at the U.S. central bank’s next policy meeting in February, with the terminal rate just below 5% in June.

Markets were hoping the Fed could soon signal the end of its rate hike cycle after recent signs of a slowing US economy, even as policymakers reiterate the central bank’s priority of controlling 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 crucial in shaping inflation expectations. interest rate.

The highly anticipated Consumer Price Index (CPI) report from the US Department of Labor is expected to show some year-on-year price moderation in December.

The Fed’s aggressive monetary policy tightening to rein in decades-high inflation has hit U.S. stocks in 2022, with all three major indexes posting their biggest annual declines 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 S&P 500 sectors, retailers (.SPXRT) rose 0.8% and led, while consumer discretionary stocks (.SPLRCD) rose 0.2%, Amazon.com Inc (AMZN .O) generating gains in both sub-indices.

Healthcare stocks (.SPXHC) rose 0.5% and also strongly boosted the benchmark S&P 500 index.

As of 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%, to 3,894.80, and the Nasdaq Composite (.IXIC) rose 17.25 points, or 0.16%, to 10,652.90.

Broadcom Inc (AVGO.O) fell 3.4% following a report that Apple Inc (AAPL.O) plans to replace a Broadcom chip in its devices with an in-house design in 2025.

Advancing issues outnumbered decliners for a 1.17-to-1 ratio on the NYSE and a 1.62-to-1 ratio on the Nasdaq.

The S&P index recorded a new 52-week high and no new low, while the Nasdaq recorded 37 new highs and 20 new lows.

Reporting by Ankika Biswas, Amruta Khandekar and Johann M Cherian in Bengaluru; Editing by Shinjini Ganguli and Shounak Dasgupta

Our standards: The Thomson Reuters Trust Principles.

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