© Reuters. FILE PHOTO: Traders work on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., March 7, 2022. REUTERS / Andrew Kelly
By Devik Jain and Bansari Mayur Kamdar
(Reuters) – Wall Street’s main indexes rose on Wednesday, boosted by technology and financial shares, as signs of progress in Ukraine-Russia peace talks increased sentiment before the Federal Reserve’s interest rate hike is widely expected.
New talks on compromise from both Moscow and Kyiv over Ukraine’s status outside of NATO stoked hopes on Wednesday of a potential breakthrough after three weeks of war.
Nine of the S&P’s 11 major sectors rallied, with financials, technology and consumer stocks – which have largely suffered from the sell-off this year – each gaining more than 2.3%.
Megacap named Apple Inc (NASDAQ 🙂 and Microsoft Corp (NASDAQ:) rose 1.8% and 1.5% respectively, powering Nasdaq and Nasdaq higher.
Major banks advanced 3% ahead of the first rate hike since 2018. Morgan Stanley (NYSE:) led the way with a 6.1% gain.
The Fed is widely expected to raise interest rates by at least 25 basis points late Wednesday, the first in a series of hikes this year as it steps up its fight against high inflation.
The policy statement goes into effect at 2 p.m. ET (1800 GMT) and will be followed by a press conference by Fed Chairman Jerome Powell. Traders will keep a close eye on updated quarterly economic and interest rate forecasts for clues on how quickly rates will move.
“In some ways, the Fed is already behind the curve. It gives the market a sense of comfort that the Fed is in the game, they’re going to start moving rates and we might get to a place where inflation is going to be.” began to calm down.” John Cunnison, chief investment officer at Baker Boyer in Walla Walla, Washington.
“Any good news on Ukraine is very likely to give market participants confidence that the Fed can raise rates without hurting growth.”
Historical data shows that tighter monetary policy is often accompanied by solid gains in equities. The S&P 500 has returned to an average of 7.7% in the first year the Fed raises rates, according to a Deutsche Bank (DE:) study of 13 hiking cycles since 1955.
At 11:45 a.m. ET, the index was up 349.25 points, or 1.04%, at 33,893.59, the S&P 500 was up 65.81 points, or 1.54%, at 4,328.26 and up 343.86 points, or 2.66%, at 13,292.49.
The CBOE Volatility Index, also known as Wall Street’s fear gauge, fell to 27.54 points, its lowest level since Feb. 25.
Global sentiment was also boosted by China’s promise to roll out more economic stimulus and keep markets steady.
U.S.-listed shares of Baidu (NASDAQ:), Alibaba (NYSE: Group, JD (NASDAQ:). Com, Tencent Music, Pinduoduo (NASDAQ 🙂 Inc and Didi Global surged from 25% to 46.4% as China’s securities regulator also said it would try to reach an agreement on China audit supervision cooperation- USA.
Kohl’s Corp (NYSE:) rose 13.4% after Axios reported Hudson (NYSE:) ‘s Bay is considering a bid for the US department store operator.
More stocks rose than fell by 3.82 to 1 on the NYSE and 4.11 to 1 on the Nasdaq.
The S&P index recorded 15 new 52-week highs and no new lows, while the Nasdaq recorded 21 new highs and 53 new lows.