Australia’s sharemarket is expected to open slightly higher this week after US investors shrugged off hawkish comments from Federal Reserve officials about interest rate hikes.
Wall Street’s benchmark S&P 500 index ended higher on Friday in a choppy trading session, as gains in defensive shares overshadowed energy declines.
Investors shrug off hawkish Federal Reserve comments.Credit:AP
Federal Reserve Bank of Boston leader Susan Collins said that, with little evidence price pressures are waning, the Fed may need to deliver another 75-basis point rate hike as it seeks to get inflation under control.
On Thursday, St. Louis Fed President James Bullard set off equity declines when he said the Fed needs to keep raising interest rates given that its tightening so far “had only limited effects on observed inflation.”
With Collins and then Bullard “we have had some very hawkish talk, but the market has really taken it in stride,” said Keith Lerner, co-chief investment officer at Trust Advisory Services. “It hasn’t hit the market to the downside like it has in the past.”
The Dow Jones Industrial Average rose 199.37 points, or 0.59 per cent, to 33,745.69, the S&P 500 gained 18.78 points, or 0.48 per cent, to 3,965.34 and the Nasdaq Composite added 1.11 points, or 0.01 per cent, to 11,146.06.
For the week, the S&P 500 fell 0.7 per cent, retreating modestly after a strong month-long rally spurred by softer-than-expected inflation data that sparked hopes the central bank could temper its market-punishing rate hikes.
The Nasdaq fell 1.6 per cent for the week, while the Dow was basically unchanged.
“Markets are in a bit of a holding pattern” ahead of employment and other economic data, said Lauren Goodwin, economist and portfolio strategist at New York Life Investments.
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