PARIS (Reuters) – The New York Stock Exchange opened higher on Thursday, supported by projections from the American Federal Reserve (Fed) of a three-time cut in key rates this year and forecasts from Micron Technology, which is leading the sector semiconductors.
In early trading, the Dow Jones index gained 187.4 points, or 0.47%, to 39,699.53 points and the broader Standard & Poor’s 500 rose 0.49% to 5,250.65 points.
The Nasdaq Composite takes 0.81%, or 131.97 points, to 16,501.37.
At the end of its two-day monetary policy meeting on Wednesday, the Fed confirmed that it still expects borrowing cost cuts of 75 basis points this year, despite the strength of inflation and the economy across the Atlantic.
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Jerome Powell, Chairman of the Fed, stressed at a press conference that recent figures showing high inflation had not changed the underlying “narrative” of a gradual easing of price pressures in the United States.
“The tone was much anticipated, it basically said that yes, we are getting closer to the point where we can cut rates, but we still need more data,” comments Mohit Kumar, chief economist for Europe at Jefferies.
The markets now anticipate a 70% probability of a Fed rate cut in June compared to a 56% probability at the start of the week.
The appetite for risky assets is also boosted by forecasts from Micron Technology which soars by 14.44%. In its wake, Intel and Nvidia, Broadcom and Western Digital advance from 1.07% to 6.05%.
Most of the major technology stocks, sensitive to fluctuations in interest rates, are also in the green while the yield on ten-year Treasuries has fallen to 4.259%.
Apple, however, drops 0.95% after information according to which the American Department of Justice is preparing to take legal action against the group for violation of antitrust laws.
IT services provider Accenture falls 6.47% after lowering its revenue forecast for fiscal 2024 amid an uncertain economic backdrop that is prompting its clients to reduce their consulting spending.
(Writing by Claude Chendjou, edited by Kate Entringer)
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