New York, Jan. 26 (BNA): Stocks rose in morning trading on Wall Street on Wednesday as investors review a strong round of earnings reports and await the Federal Reserve’s latest policy statement.
The decisive move higher was a welcome relief after several days of choppy volatility as investors try to gauge whether the Federal Reserve will succeed in its new anti-inflation efforts, according to the Associated Press.
The central bank was widely expected to continue to roll back its stimulus measures before raising interest rates in the coming months. The Federal Reserve’s latest statement will be released later on Wednesday.
Technology stocks led the market higher. Microsoft stock rose 4.1% after announcing its outstanding results for the fourth quarter of the year due to strong demand for cloud computing services and business software. Chip maker Texas Instruments rose 4.6% after giving investors a strong earnings report and financial outlook.
Retail sales, telecommunications companies, banks and industrial companies also rose. Strong earnings reports and financial expectations supported some of the gains. Corning specialty glassware industry rose 13.5% after reporting strong financial results.
Bond yields were flat. The yield on the 10-year Treasury remained at 1.78% from late Tuesday.
Several companies have issued new warnings about supply chain problems hampering their operations. Computer networking company F5 slumped 12.5% after giving investors disappointing revenue forecasts as it faces supply chain constraints.
Consumer products maker Kimberly-Clark fell 4.6% after it gave investors poor profit expectations and said it expects supply chain disruption to continue into 2022.
Inflation pressure on businesses and consumers is what is driving the Federal Reserve to raise interest rates this year. There is some concern on Wall Street that Fed Chair Jerome Powell may suggest that the central bank will raise interest rates this year more than four times what most economists currently expect.
For nearly two years, investors have been pumping money into stocks, confident that the Federal Reserve will help keep stock prices upright. With that support gone, the markets experienced a bout of volatility. The S&P 500 is down 7.6% so far this year.
Investors are also measuring the threat from COVID-19 and the impact of the omicron wave on economic growth. The International Monetary Fund cited the omicron variable as the reason for lowering its forecast for global economic growth this year.
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