FTSE 100 set to open higher after US markets soar as Fed chair signals smaller rate hikes

© Reuters. FTSE 100 set to open higher after US markets soar as Fed chair signals smaller rate hikes

Proactive Investors - FTSE 100 set to make a bright start to the day, building on yesterday’s gains, after US markets soared following comments by Federal Reserve Chair Jerome Powell who confirmed that the central bank will slow the pace of its aggressive rate-hiking campaign.

Spread betting companies are calling the lead index up by around 30 points.

In the US, the Dow Jones Industrial Average leapt 738 points, or 2.2%, to 34.590, the S&P 500 surged 122 points, or 3.1%, to 4,080 and the Nasdaq Composite jumped 484 points, or 4.4%, to 11,468 following Powell’s speech at the Brookings Institution in Washington, DC.

"The time for moderating the pace of rate increases may come as soon as the December meeting" of the Federal Open Market Committee, Powell said.

But he also stressed that the smaller hike should not be taken as a sign the Fed will let up on its inflation fight anytime soon.

Ipek Ozkardeskaya, senior analyst at Swissquote Bank suggested investors “did not listen well to what Jerome Powell said yesterday.”

She said: “In summary, Powell warned investors that the terminal Fed rate will be higher, and it will stay there longer.”

In Asia, stocks were trading higher. The Japanese Nikkei 225 index was up 0.9%. The S&P/ASX 200 in Sydney was up 1.0%. In China, the Shanghai Composite was up 0.4%, while the Hang Seng index in Hong Kong was up 1.5%.

Back in London and the manufacturing PMI is expected to come in at 46.2, still firmly in contraction territory while results are due from retail investment platform AJ Bell and online auction operator Auction Technology Group.

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