US stocks overcome Fed interest rate jitters

NEW YORK – US stocks pushed higher as trading got underway on Wednesday as interest rate hike fears faded, while eurozone shares slumped despite data showing the economy is booming.

The Dow rose 0.1 percent following the opening bell, adding to gains racked up on Tuesday after Fed chief Jerome Powell sought to ease concerns over the timing of higher interest rates in testimony before lawmakers.

“The markets appear to be finding relief from yesterday’s dovish testimony on Capitol Hill by Fed Chairman Jerome Powell,” said analysts at Charles Schwab brokerage.

Briefing.com analyst Patrick O’Hare noted that Wall Street has pretty much recovered from the losses it suffered last week, when fears that the Fed would hike rates and wind down stimulus support to ward off inflation saw the market turn in its worst weekly performance since last October.

The tech-heavy Nasdaq composite index struck a record high on Tuesday and the S&P 500 is close to its record.

O’Hare said the market is back to trading on expectations of rises in commodity prices and gravitating towards sectors that will benefit from the reopening of economies.

– Eurozone boom and bust – 

Back in Europe, a key survey showed eurozone business activity jumped at its fastest rate in 15 years this month, as a reopened economy unleashed pent-up demand in the single-currency area.

IHS Markit’s PMI index — which shows the earliest trends in manufacturing and service sectors — said eurozone activity leapt from 57.1 in May to a booming 59.2 in June, far above the 50-point level that indicates growth.

The data set the scene for major growth, closing the chapter on a double-dip recession that came with the second wave lockdowns of last autumn and winter.

If the eurozone economy is booming, its stocks were a bust, with Frankfurt’s DAX 30 index down 0.3 percent in afternoon trade, and the CAC 40 in Paris shedding 0.3 percent.

IHS Market also revealed that Britain’s private sector business activity expanded at a near-record pace as firms reopen from lockdown.

London’s FTSE 100 index was 0.5 percent higher.