Wall St eyes higher open as yields slip, traders assess economic data
By Amruta Khandekar and Shristi Achar A
(Reuters) — Wall Street's main indexes were set to open higher on Wednesday, helped by bets that the Federal Reserve had reached the end of its rate hikes and a slide in longer-dated Treasury yields, while traders assessed the latest batch of economic data.
U.S. equities have bounced back in November, with the S&P 500 coming within a whisker of its highest level this year, as signs of easing inflation boosted bets that the Fed was done with its interest rate hikes.
The benchmark index and the tech-heavy Nasdaq, however, snapped a five-session winning streak on Tuesday after minutes from the latest Fed meeting showing policymakers' cautious approach towards monetary policy weighed on optimism around the prospects of a rate cut early next year.
Data showed initial jobless claims stood at 209,000 for the week ended Nov. 18, lower than the 226,000 claims forecast in a Reuters poll of economists. Meanwhile, durable goods posted a bigger-than-expected drop of 5.4% in October.
The yield on the benchmark 10-year Treasury note slipped to 4.3906%.
A fall in energy prices and the ten-year yield are helping drive markets higher, said Art Hogan, chief market strategist at B Riley Wealth.
"«We've already started to see (a year end-rally). The three headwinds were higher energy prices, higher Treasury yields and a stronger dollar and for the last three weeks, all of those headwinds now become tailwinds,» said Hogan.
Traders have nearly fully priced in the likelihood of the Fed keeping interest rates unchanged in December, with about 31% betting on chances of a rate cut as soon as March, according to the CME Group's (NASDAQ:CME) Fedwatch tool.
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