US STOCKS-Growth stocks lift Wall Street ahead of Fed’s rate decision

Updates to open

By Anisha Sircar and Devik Jain

June 15 (Reuters) – Wall Street’s main indexes climbed more than 1% on Wednesday, boosted by gains in beaten-down growth and financial stocks, with investors waiting to see how high the Federal Reserve would raise interest rates at its policy meeting to quell inflation.

Ten of the 11 major S&P sectors advanced in early trading, with nine of them up more than 1%. Leading the pack were consumer discretionary .SPLRCD and financials .SPSY, which rose 1.6% and 1.7%, respectively.

The energy .SPNY sector was the lone decliner, dropping 0.5%.

Market heavyweights Apple Inc AAPL.O, Meta Platforms META.O, Alphabet Inc GOOGL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O added between 1.3% and 2.5%.

Traders are almost fully pricing in a 75 basis point hike from the Fed, up from 8.2% a week ago, according to CME’s FedWatch Tool. Such a big hike would lift the Fed’s short-term target policy rate to a range of 1.5% and 1.75%.

The central bank will release its statement at 2 p.m. ET (1800 GMT), with a press briefing by Fed Chair Jerome Powell expected at 2:30 p.m. ET.

“The Fed is going to go 75 basis points and attempt to talk very hawkish to try to regain control of the narrative, and when it’s all over, investors will breathe a sigh of relief,” said Zach Hill, head of portfolio strategy at Horizon Investments.

“But the medium-term (market) outlook is the Fed wanting to tighten financial conditions and so that means lower equity valuations.”

Worries about surging inflation, higher borrowing costs and rising challenges to economic growth have walloped global equities this year.

The benchmark S&P 500 index on Monday marked a more than 20% decline from its record closing high on Jan. 3, confirming it has been in a bear market, according to a commonly used definition.

Data showed U.S. retail sales unexpectedly fell 0.3% in May as motor vehicle purchases declined amid shortages, and record high gasoline prices pulled spending away from other goods.

Economists polled by Reuters had forecast retail sales gaining 0.2% last month. nL1N2Y1219

At 9:44 a.m. ET, the Dow Jones Industrial Average .DJI was up 315.84 points, or 1.04%, at 30,680.67, the S&P 500 .SPX was up 48.12 points, or 1.29%, at 3,783.60, and the Nasdaq Composite .IXIC was up 179.38 points, or 1.66%, at 11,007.73.

Goldman Sachs GS.N rose 2.4% to lead gains among the big banks.

Nucor Corp NUE.N jumped 4.6% after it forecast upbeat current-quarter profit on strong steel demand. nL4N2Y22RL

Boeing Co BA.N surged 4.7% after China Southern Airlines Co Ltd 600029.SS this week conducted test flights with a 737 MAX plane for the first time since March, in a sign the jet’s return in China could be nearing as demand rebounds. nL8N2Y218S

Advancing issues outnumbered decliners by a 5.79-to-1 ratio on the NYSE and by a 3.81-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week highs and 30 new lows, while the Nasdaq recorded seven new highs and 77 new lows.

(Reporting by Anisha Sircar, Devik Jain and Sruthi Shankar in Bengaluru; Editing by Anil D’Silva)

((Anisha.Sircar@thomsonreuters.com;))