US open: Dow jumps over 100 points as dollar continues to rise

US stocks staged a solid rebound on Wednesday, as the dollar maintained its momentum after rallying in the previous session.

Just after 15:00 BST, the Dow Jones Industrial Average was up 102 points, while the S&P 500 and the Nasdaq gained six and 18 points respectively.

Wall Street recorded a sharp selloff on Tuesday, with stocks and oil prices plunging, while the dollar continued to surge ahead.

On Wednesday, the greenback reverses early losses to gain 0.50% against the yen, 0.34% against the pound and 0.13% against the euro, while gold futures slid 0.09% to $1,186.70.

“Barring a change in Fed stance, I think the longer term trend in the dollar will now resume and we remain on course for euro and dollar to achieve parity in the fourth quarter,” said Oanda’s senior market analyst Craig Erlam.

Oil prices fell, with West Texas Intermediate edging 0.12% lower to $57.96 a barrel, while Brent crude lost 1.12% to $63.01 a barrel.

On Friday, the dollar rallied after comments from the Federal Reserve chairwoman, Janet Yellen, fuelled speculation that an interest rate hike this year might still be possible.

However, Stanley Fischer, vice president of the US Federal Reserve, said on Tuesday that the central bank will be wary of global growth when deciding its own monetary policy.

“The US is edging towards an interest rate hike while over two dozen central banks around the world have cut rates, and this gives the doves in the Fed more wiggle room,” said David Madden, IG’s market analyst.

In company news, property development group Toll Brothers fee 2.43% despite saying early on Wednesday that its second quarter earnings rose 4%.

Luxury lifestyle group Michael Kors tumbled 19% after its fourth quarter sales and revenue missed estimates, while cloud software company Workday slumped 9.63% after saying late on Tuesday that its first quarter loss widened.

Hormel Foods gained 2.88% after announcing late on Tuesday it will buy Applegate Farms for approximately $775m.

Jeweller and specialty retailer Tiffany & Co surged 11.9% after reporting better-than-expected results and outlook.

Elsewhere, European stocks gained ground after Tuesday’s selloff and Asia markets closed mixed, while there were no major economic releases ahead.