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The S&P 500 is up 15% from its mid-June, with the latest boost
coming from a slower-than-expected rise in consumer prices and a
surprise drop in producer prices in July.
The benchmark index is within sight of a 50% retracement of its
bear market loss and investors are watching the 4,231 level. The
index last closed at 4,207.27.
While policymakers remain firm about a further tightening in
monetary policy until inflation pressures fully abate, traders
see a 63.5% chance of the Fed raising rates by 50 basis points
next month instead of a 75 basis points hike. [FEDWATCH]
The Fed has raised its policy rate by 225 basis points since
March as it battles to cool demand without sparking a sharp rise
in layoffs.
High-growth and technology stocks such as Tesla and Nvidia rose
1% each in trading before the bell as investors flocked back to
riskier assets.
Growth stocks have underpeformed their value counterparts so far
this year on worries that rising Treasury yields due to
aggressive rate hikes will pressure their valuation.
Investors bought $7.1 billion in equities in the week to
Wednesday, according to a Bank of America note, with U.S. growth
stocks recording their largest weekly inflow since December last
year.
Meanwhile, banks looked set to extend their rally for sixth
straight week, with JPMorgan Chase & Co and Goldman Sachs
gaining 0.4% each in premarket trading.
At 07:28 a.m. ET, Dow e-minis were up 106 points, or 0.32%, S&P
500 e-minis were up 13.75 points, or 0.33%, and Nasdaq 100
e-minis were up 42 points, or 0.32%.
Rivian Automotive Inc slipped 0.2% even as the electric-vehicle
maker reported better-than-expected second quarter revenue.
The University of Michigan's preliminary survey of consumer
sentiment for August is expected at 10:00 am ET.
(Reporting by Bansari Mayur Kamdar and Aniruddha Ghosh in
Bengaluru)
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