New York
US stocks jumped at the open on Wednesday, after two days of steep losses, boosted by a surge in Boeing and a controversy-free State of the Union speech by President Donald Trump.
Boeing forecast full-year profit well above market estimates as it expects its busiest year ever for deliveries, sparking a 6.4 per cent surge in its shares, the biggest weight in the price-weighted Dow Jones Industrial Average.
Boeing helped the industrials sector increase 1.09 per cent, the most among the 11 major S&P sectors. But the biggest boost came from the tech sector, which gained 0.8 per cent. Microsoft and Facebook were both up more than 1 per cent ahead of their results after the bell.
The blue-chip Dow suffered its biggest two-day drop since September 2016 over Monday and Tuesday as US Treasury yields surged to near four-year highs on expectations of global central banks lowering stimulus.
The stock market has been hit by the pace of the increase, rather than the rise in yields itself, which raises borrowing costs for firms and gives traders another investment option.
Currently, the markets have priced in three rate hikes this year, and while analysts do not expect the first of them to come this month, they expect the Fed to strike a more hawkish tone.
“We’re not expecting any changes today, but we may get some insight into whether the new tax reforms have altered the views of policymakers,” said Craig Erlam, senior market analyst at Oanda.
“A slight change in the statement can get quite a reaction in the markets, so traders as ever will be looking for any signs that future rate hikes are under-priced, given the recent changes.” At 9:37am. ET, the Dow was up 252.68 points, or 0.97 per cent, at 26,329.57, the S&P 500 was up 15.72 points, or 0.55 per cent, at 2,838.15. The Nasdaq Composite was up 48.13 points, or 0.65 per cent, at 7,450.62.
US stock index futures drifted higher late on Tuesday as Trump gave his State of the Union address.
Among other comments, Trump said he wanted legislation to generate at least $1.5 trillion for infrastructure spending and revisited a campaign promise to lower drug prices.
An ADP report showing the US private sector added much more jobs in January than expected, 234,000 vs. 185,000, also boost sentiment ahead of the more comprehensive non-farm payrolls data on Friday.
Among stocks, chipmaker AMD rose 4.5 per cent, while Electronic Arts jumped 7.7 per cent after their upbeat quarterly reports.
Advancing issues outnumbered decliners on the NYSE by 2,146 to 461. On the Nasdaq, 1,806 issues rose and 554 fell.
The S&P 500 index showed 16 new 52-week highs and two new lows, while the Nasdaq recorded 38 new highs and six new lows.
