Wall Street shares rise as traders assess the future direction of the Fed monetary policy

Wall Street stocks rose on Wednesday as investors waited for details of the Federal Reserve meeting in early May, which could shed further light on the future direction of monetary policy.

The S&P 500, which fell into a bear market last week during a difficult few months for global stocks, rose 0.6 percent in volatile trading. Nasdaq Composite heavyweight gained 0.8%.

Wednesday’s moves even came as a key indicator for future U.S. manufacturing output fell short of expectations and businesses facing consumers continued to paint bleak prospects.

Orders for durable goods rose 0.4% in April from a month earlier, a slowdown of 0.6% in March and below economists’ estimates of Refinitiv for a 0.6% increase. A key reading that removes shipping orders, which can distort the data, also lost forecasts, up 0.3%.

The Fed, which monitors global monetary policy and publishes the minutes of its interest rate meeting in early May later Wednesday, has sent strong messages that it will raise borrowing costs until it calms inflation, which is above four. decades. However, some analysts question how ready the US Federal Reserve is to raise interest rates.

“Markets are telling us that the risks of a recession are increasing,” said Mary Nicola, a multi-asset portfolio manager at PineBridge Investments.

But if the Fed’s report on its latest interest rate meeting included “language that indicates a pause or that it is worried about growth, that obviously could really change the way markets are priced,” Nicola said.

Salman Baig, portfolio manager at Unigestion, said: “I would not be surprised if we started to see more language when it comes to data analysis. “It’s unlikely to be a really substantial change at this point, as they will want some pretty clear indications that inflation has changed and we have not reached it yet.”

On the corporate front, Dicks Sporting Goods on Wednesday became the last U.S. consumer business to cut its earnings prospects, dropping its shares down about 7%. This was followed by a crash in the stock markets on Tuesday, after the social media group Snap warned of macroeconomic conditions and investors were frightened by the disappointing data on US housing and business research.

In the fixed income markets, the yield on the 10-year bond, which supports the cost of borrowing worldwide and declines as the price of debt securities rises, traded steadily at 2.76 percent – at about a month low.

The yield on the two-year bond, which tracks interest rate expectations, fell 0.02 percentage points to 2.5%, having risen above 2.8% in early May.

Reflecting the continuing uncertainty about the direction of markets and monetary policy, the dollar index, which measures the US currency against six others, strengthened 0.3%.

The euro lost 0.5 percent against the dollar, hitting just over $ 1.06 as European Central Bank President Christine Lagarde’s recovery, marking the end of negative interest rates in the eurozone, vanished.

In other stock markets, Europe’s Stoxx 600 regional index rose 0.8%.

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