Wall Street to open higher; Fed’s Yellen second speech on the watch

Wall Street stock index were set for a higher open on Thursday, with market participants positively digesting Fed’s economic outlook while keeping an eye on fresh remarks from Chairwoman Janet Yellen ahead in the session.

On Wednesday, attention was directly almost entirely to Yellen’s testimony before the House Financial Services Committee. Her words were under heavy scrutiny as investors are currently assessing chances for a third rate hike later in the year.

“It’s premature to reach the judgment that we’re not on the path to 2 percent inflation over the next couple of years,” declared Yellen before Congress.

“We’re watching this very closely and stand ready to adjust our policy if it appears the inflation undershoot will be persistent.”

According to Fed funds tracked by CME Group’s FedWatch tool, traders are pricing in a 50.9 percent probability of a 25 basis point interest rate move by December.

The US central bank rose its short-term interest rate for the second time this year in June, leaving it in a range between 1.00 and 1.25 percent. In that occasion, the Federal Open Market Committee said the plan for a third rate hike was still on track.

The Dow Jones industrial average added 123.07 points to end at 21,532.14. The S&P 500 rose 0.73 percent and closed at 2,443.25, with real estate and information technology contributing most to gains. The Nasdaq composite jumped 1.1 percent to 6,261.17.

• Dow Jones Industrial Average: 123.07 / 0.57% / 21532.14
• Standard & Poor’s 500: 17.72 / 0.73% / 2443.25
• Nasdaq Composite: 67.87 / 1.10% / 6261.17

Ahead in the session, investors will closely monitor initial jobless claims and the latest reading on the producer price index for June as of 12:30 GMT. The Federal Budget Balance is set for release at 18:00 GMT. FOMC Brainard will speak at 17:00 GMT.

Fort Financial Services