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USA | Nov 23, 2022

Wall Street rises as Fed signals slowdown in rate hikes

/ Our Today

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 22, 2022. (File Photo: REUTERS/Brendan McDermid)

(Reuters)

Wall Street’s main indexes ended today (November 23) with solid gains after the Federal Reserve’s November meeting minutes showed interest rate hikes may slow soon.

A “substantial majority” of policymakers agreed it would “likely soon be appropriate” to slow the pace of interest rate hikes, the minutes showed.

“What equity markets needed to see for the recent strength to continue was what we got from the minutes,” said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

TRADING VOLUME THIN AHEAD OF THANKSGIVING

Since the Fed’s last meeting on November 1-2, investors have been more optimistic that price pressures have started to ease, meaning smaller rate hikes could curtail inflation.

The Dow Jones Industrial Average rose 95.96 points, or 0.28 per cent, to 34,194.06, the S&P 500 gained 23.68 points, or 0.59 per cent, at 4,027.26 and the Nasdaq Composite added 110.91 points, or 0.99 per cent, at 11,285.32.

Trading volume was thin ahead of the Thanksgiving holiday on Thursday, with the US stock market open for a half-session on Friday.

Earlier on Wednesday, a mixed bag of economic data led to a drop in yield on the benchmark 10-year Treasury note, helping drive stocks up.

“What I think you’re seeing is renewed investor enthusiasm fueled by those who see that beautiful light at the end of what has been a very dark tunnel. And there has been so much money on the sidelines that is rushing back into the markets and waiting to get back into the action.”

Moez Kassam, portfolio manager at Anson Funds

The number of Americans filing new claims for unemployment benefits rose more than expected last week and US business activity contracted for a fifth straight month in November. Consumer sentiment ticked higher and home sales rose above expectations.

“What I think you’re seeing is renewed investor enthusiasm fueled by those who see that beautiful light at the end of what has been a very dark tunnel. And there has been so much money on the sidelines that is rushing back into the markets and waiting to get back into the action,” said portfolio manager Moez Kassam of Anson Funds.

Heavyweight stocks, including Amazon.com Inc and Meta Platforms Inc, rose 1.00 per cent and 0.72 per cent, respectively.

Tesla Inc jumped 7.82 per cent with Citigroup upgrading the electric-vehicle maker’s stock to “neutral” from a “sell” rating.

Deere & Co soared 5.03 per cent after the farm equipment maker reported a higher-than-expected quarterly profit.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S. (File Photo: REUTERS/Brendan McDermid)

Nordstrom Inc fell 4.24 per cent as the fashion retailer cut its profit forecast amid steep markdowns to attract inflation-wary customers.

Volume on US exchanges was 9.25 billion shares, compared with the 11.6 billion average for the full session over the last 20 trading days.

Advancing issues outnumbered decliners on the NYSE by a 1.97-to-1 ratio; on Nasdaq, a 1.61-to-1 ratio favoured advancers.

The S&P 500 posted 21 new 52-week highs and no new lows, while the Nasdaq Composite recorded 97 new highs and 126 new lows.

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