PARIS, May 25 (Reuters) – The New York Stock Exchange opened slightly higher on Wednesday ahead of the release of the minutes of the U.S. Federal Reserve (Fed) April meeting which could offer investors new elements on the trajectory of future rate hikes.
In early trading, the Dow Jones index gained 17.88 points, or 0.06%, to 31,946.5 points and the broader Standard & Poor’s 500 rose 0.27% to 3,952.23 points.
The Nasdaq Composite took 0.53%, or 59.934 points, to 11,324.382.
Fed Chairman Jerome Powell said last week that the US central bank would raise rates as high as needed to stave off inflation even if that meant dampening growth.
With Fed ‘minutes’ due out at 6:00 p.m. GMT, money markets are pricing in US rate hikes of 50 basis points in June and July, a sustained pace that could derail growth and is causing some caution in the markets.
On Tuesday, early results from S&P Global’s PMI surveys showed a slowdown in activity in May, while other data pointed to a plunge in US new home sales. Durable goods orders also fell more than expected in April, according to figures released on Wednesday.
“Comments from FOMC (Federal Open Market Committee) members on the pace of inflation forecasts to decline and any further developments on (central bank) balance sheet shrinking will be scrutinized by investors,” Raffi said. Boyadjian, investment analyst at XM.
“Weaker-than-expected (Tuesday) numbers have given rise to speculation that the Fed may not have to hike rates as aggressively as previously thought,” he added.
Pending the Fed, the CBOE volatility index, also called the fear index, posted a second consecutive session of increases, at 29.7 points.
In values, Snap (+3%), which threw a chill on the communication sector (-0.3%) with its “profit warning”, regained some ground the day after a plunge of nearly 45 %. Twitter, Meta Platforms and Pinterest advance from 0.7% to 3.8%.
In today’s corporate news, Nike dropped 2% after the group failed to renew its contracts with its main franchisee in Russia, according to the daily Vedomosti.
Nordstrom is up nearly 2% after the department store chain raised its revenue and profit forecast for this year.
Wendy’s jumped around 8% as its largest shareholder Nelson Peltz said it was considering the possibility of a takeover bid for the fast-food chain.