US open: Stocks make tentative gains, Fedspeak in focus
Wall Street is adding to the previous day's recovery in shares, although traders were still somewhat wary, while officials at the Federal Reserve appeared to be taking a 'hands-off' approach to the recent sell-off.
Significantly, before the market open the head of the New York Fed, William Dudley, told an audience he did not believe the recent rout in stocks had implications for the wider economy, or "not yet".
Indeed, he described it as a "healthy" shake-out.
Against that backdrop, as of 1550 GMT the Dow Jones Industrials was tacking on 1.18% or 293.98 points to 25,200.61, alongside a rise of 0.89% or 24.13 points to 2,719.22 for the S&P 500 and a gain of 0.56% or 39.38 points to 7,155.09 in the Nasdaq Composite.
In parallel, the yield on the benchmark 10-year US Treasury note was edging higher by one basis points to 2.79%.
From a sector standpoint, the best performing industry groups were: Non-ferrous metals (6.18%), Specialty finance (5.56%) and Railroads (4.38%).
"While we can’t tell what will happen next, the current course of events has mirrored previous market selloffs – brief panic, steady recovery and then a return to the longer-term rally. It is, after all, a bull market," said Chris Beauchamp at IG.
On a more cautious note, Neil Wilson, senior market analyst at ETX Capital, noted that the US 10-year yield remains close to 2.8%, while the VIX is still elevated at around 30, suggesting that the relative calm of the last 18 months has ended and we are now in store for more gyrations in equity markets.
"Certainly there is a risk that yesterday’s rally is a fake out before another selloff," he said.
On Tuesday, all three of the major indices managed to end in the black after a late rally, recovering from huge losses on Monday, when the Dow tanked 1,175 points in what appeared to be a technical correction, likely sparked by concerns that rising inflation might force the Federal Reserve to hike rates more than expected this year.
As an aside, in a research note sent to clients Andrew Garthwaite at Credit Suisse told clients that the critical level of wage growth in the US for markets, from 3.25% to 3.50%, had not yet been reached.
In January, US average hourly earnings advanced at a 2.9% clip year-on-year.
In corporate news, Snapchat parent Snap Inc was rocketing after the social networking platform posted better-than-expected quarterly earnings on Tuesday evening.
Wynn Resorts was also higher after Steve Wynn resigned from his roles as chief executive and chairman late on Tuesday following allegations last month of sexual misconduct.
Shraes of Walt Disney were also wanted after its fourth-quarter earnings beat analysts' expectations, while stock in Michael Kors found a bid after the fashion brand's fiscal third-quarter earnings topped expectations and it lifted its full-year outlook.
Toy-maker Hasbro was also on the up despite posting a surprise drop in quarterly revenue.
Going the other way, health insurer Humana could was actively trading after its fourth-quarter profit surpassed expectations but revenues fell short.
Still to come, earnings were due from electric car maker Tesla after the closing bell.