June 15 (Reuters) – The New York Stock Exchange opened higher on Wednesday on bargain buybacks after falling sharply in previous sessions as investors await decisions from the U.S. Federal Reserve (Fed), which could accelerate the rise in its rates in the face of inflation.
In early trading, the Dow Jones index gained 350.4 points, or 1.15% to 30,715.23 points and the broader Standard & Poor’s 500 rose 1.4% to 3,787.63 points.
The Nasdaq Composite took 1.7%, or 184,244 points to 11,012,589.
Wall Street indices have fallen sharply in recent days after market participants’ expectations of the Fed’s rate move have been revised.
After a rate hike of 50 basis points in May, the markets anticipate a greater tightening of the institution’s monetary policy. They estimate a 99.7% chance of a three-quarter-point rate hike on Wednesday, according to CME Group’s FedWatch Barometer, the biggest increase in a meeting since 1994.
“The switch (..) to a very aggressive Fed policy has reduced risk appetite and caused bond market (yields) to jump out of control,” said Pierre Veyret, technical analyst at ActivTrades.
The prospect of a sharp tightening of Fed policy following a further acceleration in inflation last month and the inversion earlier this week of the two-to-ten-year segment of the US yield curve raise fears of a regression in the country.
Investors will learn at 6:00 p.m. GMT of the central bank’s press release, which will be followed by the press conference of its president, Jerome Powell, half an hour later.
Published one hour before the opening of Wall Street, the less pronounced rise than expected in manufacturing activity in the New York region in June and the unexpected drop in retail sales in the United States in May did not penalize the trend.
Semiconductor maker Qualcomm rises 0.9% following the cancellation by the General Court of the European Union of the fine of 997 million euros that the Commission imposed on it four years ago for s to have ensured the exclusivity of the supply of chips from Apple.
Chinese search engine giant Baidu takes 1.7% after reports of talks to sell its majority stake in iQIYI, the Chinese equivalent of Netflix, which takes 1.2%.
Pharma giant Moderna gains 3.6% after its COVID-19 vaccine for children and teens was recommended, while rival Pfizer slumps 1% as it halts clinical trial recruitment on its antiviral Paxlovid.