Wall St rebounds more than 1% as Powell says rate hikes are on track

March 2 (Reuters) – U.S. stock indexes rebounded more than 1% on Wednesday as Federal Reserve Chairman Jerome Powell announced the central bank would begin raising rates this month, albeit at a brisk pace following the ongoing Ukrainian crisis.

Powell’s comments, during testimony before the U.S. House of Representatives Financial Services Committee, appeared to calm some nerves after Russia’s invasion of Ukraine sent markets tumbling in recent days.

Powell said he was inclined to support a 25 basis point rate hike in March, allaying some concerns about an aggressive 50 basis point rate hike, the chances of which had largely dissipated since the worsening of the Ukrainian crisis. Read more

“You bring a certain level of certainty to the market. It also helps the market gauge the severity of the war and what the real counter-risks may have been,” said Eric Schiffer, managing director of California-based Private Equity. Firm Patriarch organization.

“And if the Fed felt that those risks were higher, there would be a question of whether they would increase at all.”

Traders now see a 5% chance of a 50 basis point rate hike by the Fed at its March meeting and a 95% chance of a 25 basis point hike. IRPR

All 11 major S&P sectors advanced, with financials (.SPSY) rebounding 2.7% after falling sharply so far this week. The Banks Index (.SPXBK) climbed 3.1%, after hitting its lowest level since September 2021 in the previous session.

Energy stocks (.SPNY) resumed their bull run, rising 2% as Brent crude hit near eight-year highs after Western sanctions disrupted the transportation of commodities exported by Russia.

Wall Street indices had a rocky start to the week, with financial stocks taking much of the damage as investors weighed the impact of tough sanctions on Russia.

Ukrainians said on Wednesday they were fighting in the port of Kherson, the first major city Russia claims to have seized, as airstrikes and shelling devastated towns that bogged down Moscow forces failed to take to capture. Read more

As of 11:41 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 573.23 points, or 1.72%, at 33,868.18.

The S&P 500 (.SPX) rose 74.28 points, or 1.72%, to 4,380.54, and the Nasdaq Composite (.IXIC) rose 165.77 points, or 1.22%, to 13,698.23 as shares of Apple Inc (AAPL.O), Microsoft Corp (MSFT.O) and Nvidia Corp (NVDA.O) gained between 1% and 2.2%.

Data showed U.S. private employers hired more workers than expected in February as the labor market recovery gathered pace. Read more

Among other stocks, Nordstrom Inc (JWN.N) jumped 37.4% after the department store chain forecast upbeat full-year revenue and earnings. Read more

Advancing issues outnumbered declining issues with a ratio of 2.51 to 1 on the NYSE and 1.82 to 1 on the Nasdaq.

The S&P index recorded 20 new 52-week highs and 2 new lows, while the Nasdaq recorded 31 new highs and 96 new lows.

Reporting by Devik Jain, Bansari Mayur Kamdar and Sabahatjahan Contractor in Bengaluru; Editing by Saumyadeb Chakrabarty

Our standards: The Thomson Reuters Trust Principles.