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US stocks rise as traders digest Fed speech

By AFP - Aug 28,2023 - Last updated at Aug 28,2023

NEW YORK — US stocks rose in early trading on Monday, as investors continued to digest a speech last week by Federal Reserve (Fed) Chair Jerome Powell laying out his vision for monetary policy. 

Powell said on Friday that the Fed is prepared to raise interest rates higher — and hold them there — to bring down above-target inflation, but will proceed "carefully" going forward.

Around 15 minutes into trading, the Dow Jones Industrial Average was up 0.9 per cent at 34,649.03.

The broad-based S&P 500 rose 0.7 per cent to 4,436.27, while the tech-rich Nasdaq Composite Index advanced 0.8 per cent to 13,693.89.

"Fed Chairman Jerome Powell's speech last Friday had something for both hawks and doves, but market reaction continues to look positive early Monday," economists from Charles Schwab wrote in a note. 

"Powell's comments seemed to ease investor concern that further rate hikes may be coming," they added.

Among individual firms, shares in the industrial conglomerate 3M rose more than six per cent in early trading.

This came on the back of a report in the Wall Street Journal that it is nearing agreement on a $5.5 billion settlement deal over claims of defective earplugs for the military.

Investors are also looking ahead to some important data releases later this week, with updated figures for second quarter economic growth and July data for the Fed's favoured inflation gauge both expected.


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