Wall St climbs as investors wait for Fed signals from Jackson Hole

By Bansari Mayur Kamdar and Devik Jain

August 25 (Reuters)The S&P 500 and Nasdaq rose on Thursday on support from growth stocks and semiconductors, as investors watched the Federal Reserve’s Jackson Hole conference for clues about its policy outlook.

Fed Chairman Jerome Powell is due to deliver a speech on Friday that will be closely scrutinized for any indication that an economic slowdown could alter the central bank’s strategy.

“The Fed is going to remain fairly resolute and vigilant in its campaign to fight and break the back of inflation,” said Todd Lowenstein, chief private banking equity strategist at Union Bank.

“The market has a kind of wishful thinking around the Fed coming to the rescue for any market trouble right now.”

Data earlier in the day showed the US economy contracted at a more moderate pace than initially thought in the second quarter, allaying some fears that a recession was underway.

Traders now see a slightly higher likelihood of a third 75 basis point interest rate hike from the Fed at its policy meeting next month, compared to a 50 basis point hike. FEDWATCH

Fed officials were coy on Thursday about the size of the interest rate hike at the September 20-21 meeting, but reiterated that rates will rise and stay high until the inflation is compressed.

Investors will also be looking for details on the Fed’s plans to shrink its balance sheet by nearly $9 trillion.

Most high-growth and tech stocks advanced midday, with Amazon.com Inc AMZN.O and Alphabet Inc. GOOGL.O adding more than 1% each as Treasury yields fell after four straight sessions of gains. WE/

But electric vehicle maker Tesla Inc. TSLA.O slipped 1.0% after its 3-for-1 stock split took effect.

At 11:47 a.m. ET, the Dow Jones Industrial Average .DJI was up 43.39 points, or 0.13%, at 33,012.62, the S&P 500 .SPX was up 24.40 points, or 0.59%, at 4,165.17, and the Nasdaq Composite .IXIC was up 99.08 points, or 0.80%, at 12,530.61.

Nine of the 11 major sectors of the S&P 500 rose, with .SPLRCM and financial stocks .SPSY main gains.

Banks .SPXBK added 1.6%, with Citigroup Inc NC up 2.2% after announcing plans to shut down its consumer and commercial banking business in Russia starting this quarter.

Earnings Cap on Blue-chip Dow, Salesforce Inc CRM.N fell 5.5% as it slashed its annual guidance on “metered” customer spending and due to a stronger dollar.

Graphics chip designer Nvidia Corp NVDA.O rose 3.0% even as it forecast a sharp drop in revenue for the current quarter due to a weaker gaming industry.

“Investors will likely view this as an offsetting event and positive for the stock as further decline is likely to be limited beyond the third quarter,” Goldman Sachs analysts said.

The wider semiconductor industry .SOX gained 2.6%, along with peers Micron Technology Inc MU.O and Advanced Micro Devices Inc. AMD.O adding 4% each.

The White House said President Joe Biden had signed an executive order implementing the $52.7 billion Semiconductor Chip Manufacturing and Research Grants Act.

Advancing issues outnumbered declining issues with a 3.03-to-1 ratio on the NYSE and a 1.84-to-1 ratio on the Nasdaq.

The S&P index recorded three new 52-week highs and 29 new lows, while the Nasdaq recorded 41 new highs and 44 new lows.

(Reporting by Bansari Mayur Kamdar, Devik Jain and Chavi Mehta in Bengaluru; Editing by Maju Samuel and Aditya Soni)

(([email protected]; Twitter: @BansariKamdar))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.