U.S. stocks rise with yields as Fed messages digested
BNN Bloomberg
European stocks rose and U.S. index futures pointed to a stronger open on Wall Street after two days of losses triggered by Federal Reserve signals that interest rates would continue to rise for a while yet.
Europe's Stoxx index rose 0.8 per cent, led by energy, banking and utilities, though shares stayed on track to snap a four-week rising streak. While the US S&P 500 index is down one per cent so far this week, index futures on the benchmark gained 0.3 per cent. Nasdaq contracts also advanced, while in New York premarket trading, chip equipment maker Applied Materials rose 4.1 per cent after issuing a forecast-topping sales forecast. A host of tech names, including Nvidia Corp., Meta Platforms Inc. and Amazon.com Inc., also gained.
The moves come a day after shares were knocked sharply lower by hawkish comments from St. Louis Fed President James Bullard, who said interest rates needed to rise at least to 5 per cent-5.25 per cent to curb inflation. His comments prompted markets to dial up their expectations for how high U.S. rates might go.
The dollar retreated while Treasury yields extended their surge in the wake of Bullard's comments. But Bullard is only the latest policymaker to warn markets that while inflation appears to be easing off multi-decade highs, policy needs to be tightened further to tame price pressures.
