NEW YORK (AP) — Wall Street adds to its gains early Wednesday as markets begin to hope there might be better news on the horizon about inflation, the war in Ukraine and other worries that have destabilized investors. The S&P 500 rose 1.5% and the Nasdaq 1.7%. Chinese markets soared overnight after Beijing promised to help that country’s ailing real estate sector and its internet companies. Ukraine’s president made a direct appeal for help to US lawmakers in a speech. Later today, the Federal Reserve is expected to raise interest rates for the first time since 2018.
THIS IS A BREAKING NEWS UPDATE. AP’s previous story follows below.
NEW YORK (AP) — U.S. markets are poised to follow global stocks higher on Wednesday after Chinese leaders pledged increased support for a slowing Chinese economy, as investors awaited the outcome of a Federal Reserve meeting.
Dow Jones industrial futures rose 1.2% and S&P 500 futures gained 1.3% after Hong Kong’s benchmark jumped 9% overnight .
A variety of factors contributed to the latest rally, including comments from Ukrainian President Volodymyr Zelenskyy suggesting there was still reason to be optimistic the talks could still yield a deal with the Russian government.
Yet Russia stepped up its bombardment of the Ukrainian capital and launched new assaults on the port city of Mariupol, making bloody advances on the ground on Wednesday as Zelenskyy prepared to issue a direct appeal for more help in a rare speech by a foreign leader in the United States. Congress.
France’s CAC 40 jumped 3.5%, while Germany’s DAX gained 3.2% and Britain’s FTSE 100 rose 1.4%.
At its policy meeting later on Wednesday, the Fed is expected to raise its short-term policy rate by 0.25 percentage points. This would be the first increase since 2018, pulling it off its all-time high of near zero, and likely the start of a series of increases.
The Fed is trying to slow the economy enough to stem the high inflation that is sweeping the country while avoiding triggering a recession.
Inflation is already at its highest level in generations, and the most recent figures do not include the spike in oil prices after Russia invaded Ukraine. The move comes as central banks around the world prepare to end support for the global economy following the outbreak of the pandemic.
“The reference to ‘rearranging deck chairs on the Titanic’ is not meant to invoke despair. Rather, it is meant to convey a sense of the inevitability of the upcoming Fed tightening cycle,” said Tan Boon Heng of Mizuho Bank in Singapore.
The surge in Hong Kong’s Hang Seng index was a respite from recent selloffs by Chinese tech companies and other pressures that had taken it to six-year lows.
At a Cabinet meeting on Wednesday, officials promised to “reinvigorate the economy” with “support measures” for struggling real estate and other steps, the official Xinhua news agency reported.
At a meeting chaired by Vice Premier Liu He, President Xi Jinping’s top economic adviser, Cabinet officials called on government agencies to release other “market-friendly” policies, Xinhua said.
He also said talks between Chinese and U.S. regulators on resolving a dispute over rules governing foreign companies listed on U.S. markets had progressed.
The Hang Seng gained 9.1% to 20,087.50. The Shanghai Composite Index added 3.5% to 3,170.71.
Shares of e-commerce giant Alibaba Group Holding jumped 23.6%. Tencent Holdings, operator of popular messaging service WeChat, jumped 23% and live streaming site Kuaishou Technology added 31.4%.
Japan’s benchmark Nikkei 225 rose 1.6% to end at 25,762.01. Australia’s S&P/ASX 200 gained 1.1% to 7,175.20. The South Korean Kospi gained 1.4% to 2,659.23.
Renewed concerns about COVID-19 in some regions along with a long list of other concerns have caused wild hour-to-hour swings in the markets over the past few weeks. The war in Ukraine has pushed up the prices of oil, wheat and other commodities that the region produces. This increases the threat that already high inflation will persist and combine with a potentially stagnant economy.
Benchmark U.S. crude rose 49 cents to $96.93 a barrel in electronic trading on the New York Mercantile Exchange.
A barrel of US crude fell 6.4% to $96.44 on Tuesday. It had briefly topped $130 last week when concerns about supply disruptions due to the war in Ukraine were at their height.
Brent crude, the international price standard, rose 11 cents to $100.02 a barrel.
In other developments, nickel trading was halted again on the London Metal Exchange on Wednesday after briefly recovering from a week-long suspension when the price of the metal soared to over $100,000 a day. tonne. The exchange said it was investigating a “system error” that resulted in a few trades being made below the lower price limit introduced to curb volatility.
Russia is the world’s third largest producer of nickel. Its price and that of many other commodities rose on speculation of possible supply disruptions as Russia faces widening economic sanctions following its invasion of Ukraine.
In currency trading, the US dollar stood at 118.29 Japanese yen, little changed from 118.31 yen. The Euro traded at $1.1002, down from $1.0955 previously.
Starbucks shares rose more than 5% in premarket trading after chairman and chief executive Kevin Johnson announced he would retire next month. The company’s former CEO and founder, Howard Schultz, will replace him on an interim basis.
AP Business Writer Joe McDonald in Beijing contributed.