(New York = Yonhap News) Yoon Young-sook, correspondent for Yonhap Infomax = New York stocks rose ahead of the results of the Federal Open Market Committee (FOMC) regular meeting of the Federal Reserve.
As of 10:29 am at the New York Stock Exchange (NYSE) on the 15th (Eastern time), the Dow Jones Industrial Average recorded 30,699.02, up 334.19 points (1.10%) from the previous field.
The Standard & Poor’s (S&P) 500 index rose 48.45 points (1.30%) to 3,783.93, and the Nasdaq index, centered on technology stocks, rebounded 176.76 points (1.63%) from the battlefield to 11,005.10.
The Fed announces its FOMC results at 2:00 pm EST on that day, and Fed Chairman Jerome Powell will hold a press conference 30 minutes later.
In addition, a dotplot containing members’ interest rate forecasts and the Fed’s inflation and growth forecasts will be released.
Markets are expecting the Fed to raise rates by 0.75 percentage points at this meeting, which is more than the 0.5 percentage points originally planned.
According to CME FedWatch, there is a 99% chance that traders will raise the interest rate by 0.75 percentage points in June in the interest rate futures market. This is a significant increase from 8.2% recorded a week ago, and shows that the mood has turned around since the Consumer Price Index (CPI) was released in May.
Some are arguing that the Fed should show its willingness to contain inflation by raising rates above 0.75 percentage points to restore market confidence.
Pershing Square Capital chief executive Bill Ackman said the Fed might restore market confidence if it raises rates by 0.75 percentage points in June and July. Said this might be better.
The market has entered a wait-and-see situation ahead of the FOMC results. Markets are paying attention to whether the Fed will raise rates by 0.75 percentage points as expected, as concerns regarding high-strength tightening are reflected in prices.
U.S. consumption data released today were sluggish.
Retail sales in May were $672.9 billion, seasonally adjusted, down 0.3% from the previous month, according to the Commerce Department. This was lower than the 1.0% increase expected by the Wall Street Journal (WSJ) and was weaker than the revised 0.7% increase in the previous month.
The European Central Bank (ECB) held an emergency meeting and announced market stabilization measures in response to the surge in interest rates on government bonds in neighboring countries in the eurozone.
The ECB today announced a new market support tool to strengthen flexibility in reinvesting in maturing bonds under the existing Pandemic Emergency Purchase Program (PEPP) and to prevent regional divisions.
As the eurozone government bond yields fell sharply on the news, the US government bond yields also fell.
New York stock market analysts said the Fed’s massive rate hike was a sign of the Fed’s commitment to price stability.
“The headline change from a 0.5 percentage point increase to a 0.75 percentage point increase reflects the grim reality, but it also reflects the Fed’s commitment to achieving price stability,” Quincy Crosby, chief equity strategist at LPL Financial, told CNBC.
“It’s not a public opinion move, it’s not an idea that’s going to fail, it’s just reality,” he said.
European stocks rose all at once.
Germany’s DAX index rose 1.94%, while the UK FTSE index rose 1.72%. The pan-European STOXX600 index is up 1.95%.
International oil prices fell slightly.
The price of West Texas Intermediate (WTI) crude for July was $118.16 per barrel, down 0.71% from the battlefield, and the price of Brent for August was $120.54 per barrel, down 0.51% from the battlefield.
A trader at work in the NYSE lobby
ysyoon@yna.co.kr
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