- US retail sales fell 0.3 percent in May to $672.9 billion, as rising fuel prices and other factors.
- Report comes ahead of the US central bank’s policy announcement later Wednesday.
- Many think a rate hike will result in a 75-basis-point increase after weeks of a smaller increase.
Wall Street stocks opened higher on Wednesday, despite data showing weak US retail sales, as markets await the Federal Reserve’s new response to inflation.
According to Commerce Department data, US retail sales fell 0.3 percent in May to $672.9 billion, as rising fuel prices and other factors weighed on consumers.
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The report comes ahead of the US central bank’s policy announcement later Wednesday that many investors think will result in a 75-basis-point hike after weeks of the Fed telegraphing a smaller increase.
In other central bank news, the European Central Bank held an emergency meeting to discuss tools for quelling rising borrowing costs for more indebted eurozone members as it, too, embarks on a monetary tightening policy.
About 20 minutes into trading, the Dow Jones Industrial Average was up 1.2 percent at 30,731.42.
The broad-based S&P 500 increased 1.4 percent to 3,788.66, while the tech-heavy Nasdaq Composite Index increased 1.7 percent to 11,011.31.
According to Briefing.com analyst Patrick O’Hare, expectations for a higher rate hike are coupled with the “assumption that a 50-basis point rate hike would be perceived as weak and disappointing given the inflation pressures.”
“The Fed Chair, however, is going to have to produce something at today’s press conference that helps restore the Fed’s inflation-fighting credibility. Frankly, the unruly behaviour of the bond markets implies a lack of credibility on that front.”
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