Stocks open higher ahead of Fed interest rate decision | Technology

NEW YORK (AP) — Stocks open higher on Wall Street on Wednesday but remain sharply lower for the week as trading remains volatile ahead of a closely watched decision on interest rates later in the day from the Federal Reserve. Yields on Treasuries have fallen but remain at the highest level in more than a decade as investors expect inflation to remain hard to control for some time. The S&P 500 rose 1.3%, while gains from technology companies helped lift the Nasdaq 1.7%. The Dow Jones Industrial Average gained 1.1%. The 10-year Treasury yield fell to 3.40%.

THIS IS A BREAKING NEWS UPDATE. AP’s previous story follows below.

NEW YORK (AP) — U.S. markets were poised to rebound Wednesday ahead of the Federal Reserve’s expected action to raise interest rates in its continued effort to calm inflation.

Dow Jones Industrial Average futures rose 0.6% and S&P 500 futures gained 0.8% as oil prices fell.

Economists believe the Fed could raise rates by three-quarters of a percentage point, triple the usual increase, with the cost of living for americans rises surprisingly quickly.

A “hawkish surprise” from the Fed could be an “additional shock to risk assets,” ActivTrades’ Anderson Alves said in a report. “Money markets already price around 90% of the possibility of such action.”

Turmoil in the cryptocurrency sector continued to rattle investors. Bitcoin is down 5% and close to $20,000 in the early morning. Bitcoin has lost about a third of its value over the past week and is down almost 70% from an all-time high of around $68,000 in November. Other cryptocurrencies have followed a similar trajectory and Ethereum is down nearly 8% on Wednesday.

By noon, the FTSE 100 in London and the DAX in Frankfurt both gained 1.3%. The CAC 40 in Paris rose by 1%.

The Shanghai Composite Index gained 0.5% on Wednesday to 3,305.41 after government data showed Chinese factory activity rebounded in May as virus checks shut down businesses in Shanghai and across other industrial centers have slackened.

Hong Kong’s Hang Seng gained 1.1% to 21,308.21 while Tokyo’s Nikkei 225 lost 1.1% to 26,326.16.

The Kospi in Seoul fell 1.8% to 2,447.538 after South Korea’s unemployment rate in May rose 0.1 percentage point to 2.8%.

Sydney’s S&P-ASX 200 fell 1.3% to 6,601.00.

The Indian Sensex gained less than 0.1% to 52,728.02. New Zealand, Jakarta and Bangkok fell while Singapore advanced.

On Tuesday, the S&P 500 lost 0.4%. It closed Monday 21.8% below its Jan. 3 peak, officially placing the market in its second pandemic bear market.

The Dow Jones fell 0.5% and the Nasdaq composite rose 0.2%.

Expectations of an unusually large Fed rate hike rose after Friday government data showed Consumer price inflation accelerated in May instead of softening as expected.

The Fed is scrambling to rein in prices after being criticized earlier for reacting too slowly to inflationary pressures.

The UK central bank also raised rates. The European Central Bank announces that it will do so next month.

Japan’s central bank kept rates at historic lows. That sent the yen tumbling to its lowest level in two decades below 135 to the dollar as traders shift capital in search of higher yields.

Markets were also rocked by Russia’s attack on Ukraine, which pushed oil prices to all-time highs above $120 a barrel, and virus outbreaks in China that shut down oil prices. factories and disrupted supply chains.

In energy markets, benchmark U.S. crude fell 55 cents to $118.38 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost $2 on Tuesday at $118.93. Brent crude, the price basis for international oil trade, fell 39 cents to $120.78 a barrel in London. It fell from $1.10 the previous session to $121.17.

The dollar fell to 134.43 yen from 135.30 yen on Tuesday. The euro gained $1.0476 from $1.0411.

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