Wall St rises as Fed’s Powell steers clear of monetary policy outlook

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, focusing on an upcoming inflation reading scheduled for later this week.

Powell’s comments, which gave no clues about the Fed’s plans for future tightening, came as a big relief after two other policymakers on Monday injected a warning about the interest rate outlook.

“He (Powell) hasn’t disrupted the market in any way, and the fact that he’s emphasizing the need for political independence while tackling inflation, that’s definitely positive for the markets,” said Peter Cardillo, chief market economist at Spartan Capital Securities. New York.

Traders held on to bets on a 25 basis point rate hike at the US Federal Reserve’s upcoming meeting in February, with the terminal rate just below 5% by June.

Markets have been hoping the Fed could soon signal an end to the rate hike cycle following recent signs of a slowdown in the US economy, even as policymakers reiterated the central bank’s priority to bring inflation under control.

“The Fed has a little more to tighten,” said David Russell, vice president of market intelligence at TradeStation Group, adding that Thursday’s inflation report will be crucial in shaping interest rate expectations.

The long-awaited consumer price index (CPI) report from the US Department of Labor is expected to show some moderation in annual prices in December.

The Fed’s aggressive monetary tightening to curb decades of high inflation hammered US stocks in 2022, with the three main indexes posting their steepest 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 major S&P 500 sectors, retailers ( .SPXRT ) were up 0.8% and in the lead, while consumer staples ( .SPLRCD ) rose 0.2%, with Amazon.com Inc ( AMZN.O ) driving gains in both sub-indexes.

Healthcare shares (.SPXHC) rose 0.5% and were also a big boost to the benchmark S&P 500.

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 Composite (.IXIC) was up 17.25 points, or 0.16%, at 10,652.90.

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

Advances outnumbered declines by 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

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