Tech Stocks Leading Rebound On Wall Street Ahead Of Fed Decision
Stocks have moved mostly higher in morning trading on Wednesday, regaining ground following the sell-off seen in the previous session. The major averages have all moved to the upside, with the tech-heavy Nasdaq posting a particularly strong gain.
Currently, the major averages are just off their highs of the session. While the Nasdaq is up 269.76 points or 2.3 percent at 11,832.33, the S&P 500 is up 47.42 points or 1.2 percent at 3,968.47 and the Dow is up 144.72 points or 0.5 percent at 31,906.26.
The rally on Wall Street partly reflects strong gains by Google parent Alphabet (GOOGL) and software giant Microsoft (MSFT).
Shares of Alphabet are surging by 5.3 percent after ending Monday’s trading at its lowest closing level in well over a year.
The rebound by Alphabet comes as the company reported second quarter results that missed analyst estimates but were not as bad as some investors had feared.
Shares of Microsoft are also jumping by 4.9 percent after the company reported weaker than expected fiscal fourth quarter results but provided upbeat guidance.
The rally by the Nasdaq also comes amid substantial strength among semiconductor stocks, with the Philadelphia Semiconductor Index spiking by 3.2 percent.
Considerable strength is also visible among networking stocks, as reflected by the 1.9 percent gain being posted by the NYSE Arca Networking Index.
Retail stocks are also turning in a strong performance after leading the way lower on Monday following a warning from Walmart (WMT).
On the other hand, tobacco stocks have shown a significant move to the downside, dragging the NYSE Arca Tobacco Index down by 3.1 percent.
The overall strength on Wall Street comes as traders look ahead to the Federal Reserve’s monetary policy announcement this afternoon.
With the Fed widely expected to raise interest rates by another 75 basis points, traders are likely to keep a close eye on the accompanying statement and Fed Chair Jerome Powell’s post-meeting press conference for clues about the outlook for future rate hikes.
On the U.S. economic front, the Commerce Department released a report on Wednesday showing an unexpected surge in new orders for U.S. manufactured durable goods in the month of June.
The Commerce Department said durable goods orders jumped by 1.9 percent in June after climbing by 0.8 percent in May. The continued increase surprised economists, who had expected durable goods orders to dip by 0.4 percent.
Excluding a spike in orders for transportation equipment, durable goods orders rose by 0.3 percent in June following a 0.5 percent increase in May. Economists had expected ex-transportation orders to edge up by 0.2 percent.
Meanwhile, a separate report from the National Association of Realtors showed pending home sales in the U.S. pulled back sharply in the month of June.
NAR said its pending home sales index plunged by 8.6 percent to 91.0 in June after rising by 0.4 percent to a revised 99.6 in May.
Economists had expected pending home sales to slump by 1.5 percent compared to the 0.7 percent increase originally reported for the previous month.
A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.
In overseas trading, stock markets across the Asia-Pacific region turned in another mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index edged up by 0.2 percent, while Hong Kong’s Hang Seng Index slumped by 1.1 percent.
Meanwhile, the major European markets have all moved to the upside on the day. While the German DAX Index has risen by 0.5 percent, the U.K.’s FTSE 100 Index and the French CAC 40 Index are both up by 0.7 percent.
In the bond market, treasuries have moved higher over the course of morning after initially showing a lack of direction. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.8 basis points at 2.759 percent.
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