Wall Street up sharply ahead of Powell testimony
US stocks rose sharply on Monday, led by gains across sectors as investors bet that Federal Reserve Chairman Jerome Powell will stick to a gradual rate-hike approach despite indications that inflation is perking up.
Powell faces questions from both houses of the US Congress in a semi-annual testimony starting on Tuesday, his first major set piece since he took over from Janet Yellen earlier this month.
His testimony comes at a time when investors have been anxious about the pace of rate hikes, which have weighed on equity markets globally.
"I don't think he's going to say anything dovish or hawkish – in an attempt to at least have the first appearance to be down the middle or balanced," said Art Hogan, chief market strategist at B. Riley FBR in Boston.
"I surely think the current Fed would let some inflationary pressure run hotter than their target for a period without getting more aggressive."
The Fed said on Friday it expected economic growth to remain steady and saw no serious risks on the horizon that might pause its planned pace of rate hikes.
The US 10-year Treasury yields eased to 2.8587 per cent , slipping from the four-year high it hit last week, while the CBOE Volatility index, known as Wall Street's fear gauge, was last at 16.12.
At 12:37 p.m. ET, the Dow Jones Industrial Average was up 274.71 points, or 1.09 per cent, at 25,584.7 and the S&P 500 was up 19.41 points, or 0.71 per cent, at 2,766.71.
The Nasdaq Composite was up 51.29 points, or 0.7 per cent, at 7,388.68.
Technology stocks, which led the S&P 500 sectors on Monday, have been the top gainers so far this year, with an 8.6 per cent rise.
Qualcomm was up 3.4 per cent after the chipmaker urged Broadcom to enter into price negotiations for the first time on Broadcom's $117 billion offer for the company.
General Electric dipped 1.73 per cent and was the most traded stock across all US exchanges after the company nominated three new candidates to its board.
Berkshire Hathaway gained 3.22 per cent after Warren Buffett said his conglomerate, which is sitting on $116 billion of cash, is "more inclined" to repurchase stock than pay dividends as a means to use excess cash.
Advancing issues outnumbered decliners on the NYSE by 1,793 to 1,032. On the Nasdaq, 1,745 issues rose and 1,088 fell.