NEW YORK: Wall Street stocks rose early Wednesday, as the tech-heavy Nasdaq advanced for a third day while investors brace for closely watched inflation data.
The movement comes after Federal Reserve Chair Jerome Powell avoided giving clear indications on future monetary policy decisions Tuesday, while Fed governor Michelle Bowman flagged hopes in separate remarks that the United States can lower inflation without a major downturn.
Minutes into trading, the Dow Jones Industrial Average ticked up 0.3 percent to 33,817.19.
Nasdaq leads gains on Wall Street as interest rate worries ease
The broad-based S&P 500 bounced 0.4 percent to 3,933.08, while the Nasdaq Composite Index edged 0.2 percent higher to 10,763.98.
“Some might argue that the market feels emboldened to trade higher because Fed Chair Powell did not purposely kill the market’s rebound activity in his speech,” said Patrick O’Hare of Briefing.com in an analysis.
But others may think that Powell “tacitly warned” the market not to get too optimistic about a Fed pivot, he said.
The Fed has raised interest rates aggressively in the past year to rein in price increases, and inflation data on Thursday will be scrutinized for its implications on further action.
“In any case, an upside bias is winning out thus far based on a prevailing view that weakening economic activity and fading inflation will help the Fed realize that it does not need to raise rates much further,” said O’Hare.
Jack Ablin of Cresset Capital added that the mood appears optimistic, with investors “latching on to slowing economic activity, both here and abroad.”
“(They are) taking it as bad news is good news right now,” he said.
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