US stocks climbed at the start of trading on Thursday, a day after the Federal Reserve signalled that it will pause its interest rate increases.
Following its two-day policy meeting, the Fed dropped its guidance that previously called for some additional rate rises, instead saying that it will be “patient” in the wake of market volatility and tepid inflation growth. The news, coupled with reassuring comments from Fed chair Jay Powell, sent the market sharply higher on Wednesday, pushing Treasury yields lower and putting stocks on track to register their strongest month since October 2015 after a dismal December.
The S&P 500 added to those gains on Thursday morning, climbing 0.6 per cent to 2,697.73. Communication services and energy led the rally, with the former jumping 4 per cent. Materials, down 1.4 per cent, and financials, down 0.6 per cent, were the worst performers.
The Dow Jones Industrial Average fell 0.2 per cent to 24,968.11. The tech-heavy Nasdaq, boosted by Facebook, gained 1.3 per cent to 7,274.15.
Facebook was in the spotlight amid another round of corporate earnings. Shares in the social media giant soared 13 per cent after it reported a record profit, easing investors’ concerns over the impact of data privacy scandals.
Other tech companies also saw gains. Twitter rose more than 2 per cent, while Amazon was up 2.2 per cent ahead of the ecommerce group’s earnings report.
General Electric joined the top gainers in the S&P, rallying 14 per cent on quarterly revenue that exceeded forecasts.
The blue-chip Dow was largely weighed down by a 7.3 per cent decline for DowDuPont, which reported flat sales in the latest quarter. Microsoft and Visa also pressured the index as their stocks fell in reaction to earnings.
Investors are also watching trade developments this week as US and Chinese hold talks in Washington. President Donald Trump tweeted that meetings were “going well” and he would meet China’s representatives in the White House on Thursday. Mr Trump added that a final deal will not occur until he meets with Chinese president Xi Jinping “in the near future.”
The dollar index, which measures the greenback against global currencies, was flat at 95.34.
The yield on the 10-year Treasury note fell 4.4 basis points to 2.6506 per cent. The more policy-sensitive two-year yield dropped 4 basis points to 2.4879 per cent. Yields move inversely to prices.
Oil posted gains amid data showing smaller US stockpiles than expected and sanctions on Venezuela. West Texas Intermediate added 2 per cent, hitting $55.32 a barrel. Brent crude rose 1.1 per cent to $62.30 a barrel.
