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US indices get a boost from Powell speech

American equity benchmarks closed sharply higher on Wednesday, March 2, on the heels of the Fed Chair’s positive testimony to the US House of Representatives. Jerome Powell made it clear that the interest rate hike will not be as hawkish as previously expected. Investors feared an epic 0.75 bps rise. The market for risk-sensitive assets shot up on the back of this positive event, with the indices up in the range of 1.6-1.9%.

The reversal of monetary policy amid record inflation is no longer in doubt. However, the geopolitical crisis has triggered a bull run in energy prices, which will speed up the already rapid rate of inflation stateside.

Closes

NASDAQ Composite: 13,752 (+1.62%)

S&P 500: 4,386 (+1.86%)

DJIA: 33,891 (+1.79%)

SPX 500 CFDs are hovering near the upper bounds of the consolidation range of 4,300-4,400 in pre-market trading. The index is closing in on a key resistance level, so if the bulls can muster a breakout, we can expect a leg up to 4,500 (see below the CFD chart on the SPX 500 from MT4).

Market news

Powell's testimony before the US House Financial Services Committee helped reassure investors as the regulator is inclined to support a 25 bp rate hike.

Corporate news

The share price of retailer Nordstrom Inc soared 37.8%. According to the Q4 2021 results, the company reported net profit and revenue well ahead of the median consensus and issued optimistic guidance for 2022.

Hewlett Packard Enterprise spiked 10.25%. The provider of IT solutions boosted net profit in Q1 and improved its full-year guidance.

Ford Motor securities surged 8.4%. The automaker reported almost a 21% drop in YoY sales in February, but new orders quadrupled to an all-time high.

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