U.S. Stocks Open Higher Ahead of Fed Decision
June 19 2019 - 10:07AM
Dow Jones News
By Nathan Allen and Joanne Chiu -- U.S. stocks open higher, with S&P 500 up 0.1%
-- Yield on 10-year Treasurys rise
-- Asian indexes rallied, led by gains in Hong Kong
U.S. stocks opened higher Wednesday ahead of the Federal
Reserve's highly anticipated interest-rate decision later in the
day.
The Dow Jones Industrial Average rose 36 points, or 0.1%, to
26502 shortly after the opening bell. The S&P 500 also added
0.1% and the Nasdaq Composite climbed 0.1%.
Major indexes around the world surged Tuesday, while bond yields
dropped after European Central Bank President Mario Draghi signaled
the ECB could cut rates and expand its bond-buying program to shore
up eurozone inflation.
On Tuesday, Mr. Trump and Chinese President Xi Jinping agreed to
meet at next week's Group of 20 summit in Japan, sparking hopes for
a trade truce and driving up U.S. indexes near their record
highs.
"The upcoming meeting in Japan is unlikely to deliver a major
breakthrough for the U.S.-China trade relationship, but having the
two sides talk is better than no talk," said Steven Leung,
executive director of institutional sales at UOB Kay Hian.
Wednesday's focus remained squarely on the Fed, which is set to
publish a statement outlining its position on future rate cuts.
ING senior rates strategist Benjamin Schroeder said investors
hoping for a July rate cut will likely be disappointed. Fed
Chairman Jerome Powell will instead aim to strike a balance between
avoiding committing to any near-term loosening, while hinting at
the possibility of future cuts, Mr. Schroeder said.
Further complicating the situation, Mr. Trump suggested Tuesday
that he would consider demoting Mr. Powell if he isn't satisfied
with the meeting's outcome. Mr. Trump has called repeatedly on the
Fed to lower interest rates to boost the economy.
In Europe, weakness in utilities and retail companies was offset
by gains in the automotive and banking sectors, leaving the Stoxx
Europe 600 benchmark largely flat in afternoon trade.
Chinese equities led gains in Asia, where markets welcomed
upbeat comments on trade from President Trump and the prospect of
fresh central-bank stimulus for the eurozone.
Hong Kong's benchmark Hang Seng Index rose 2.6% to a one-month
high, while the Shanghai Composite was up 2.2%. Other major indexes
in Japan, Singapore, South Korea and Taiwan gained more than
1%.
Australian stocks reached their highest level in more than 11
years, with the country's ASX 200 benchmark moving within 3% of
2007's best-ever finish.
Elsewhere, the U.K.'s consumer inflation rate rose 2% on the
year in May, in line with expectations. The Bank of England is due
to publish its own rate decision Thursday, though analysts don't
expect Gov. Mark Carney to echo the ECB's dovish rhetoric.
The yield on the 10-year U.S. Treasury note, which falls as
prices rise, rose to 2.088% after settling at 2.060% Tuesday.
In commodities, global oil benchmark Brent crude fell 0.8% to
$61.64 a barrel, while gold slipped 0.3% to $1,346 a troy
ounce.
The WSJ dollar index, which measures the currency against a
basket of its peers, was down 0.13%.
Write to Nathan Allen at nathan.allen@dowjones.com and Joanne
Chiu at joanne.chiu@wsj.com
(END) Dow Jones Newswires
June 19, 2019 09:52 ET (13:52 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.