Wall St gains as Microsoft, Amazon rise

Wall Street’s main indexes have edged higher, boosted by gains in Microsoft and Amazon, as investors assessed commentary from Federal Reserve Chair Jerome Powell that steered clear of the monetary policy outlook.

Microsoft Corp rose 1.2 per cent after a report stated the software company was in talks to invest $US10 billion ($A15 billion) in ChatGPT creator OpenAI.

The gains pushed up the S&P 500 information technology sector 0.3 per cent while a 1.6 per cent rise in Amazon boosted the consumer discretionary sector.

Boeing Co dipped 1.3 per cent, pressuring the Dow Jones, on a report that Morgan Stanley downgraded the US plane maker’s rating to “equal weight” from “overweight”.

The US central bank’s independence from political influence is central to its ability to battle inflation, Powell said on Tuesday.

Powell’s remarks failed to assuage investors rattled by remarks from two other Federal Reserve policymakers on Monday.

The comments had dampened hopes that inflation in the United States had peaked and the Fed may soon signal an end to its rate hiking cycle, bolstered by data last week that showed a moderation in wage increases.

“He (Powell) hasn’t disrupted the market in any way and the fact that he stresses the need for political independence while tackling inflation, that’s a definite positive for the markets,” said Peter Cardillo, chief market economist at Spartan Capital Securities, New York.

“But he has not touched upon or given hints about what the Fed is going do in the future on rates.”

Money market bets of a 25-bps hike to in the Fed’s upcoming policy meeting were unchanged at 75 per cent, with the terminal rate seen slightly below 5.0 per cent by June.

Investors are now keenly awaiting the US Labor Department’s consumer prices report on Thursday.

It is expected to show some moderation in year-on-year consumer prices in December.

The Fed’s aggressive monetary policy tightening to curb decades-high inflation hammered US equities in 2022, with the three main indexes logging their steepest annual declines since 2008.

In early trading, the Dow Jones Industrial Average was up 111.74 points, or 0.33 per cent, at 33,629.39, the S&P 500 was up 16.52 points, or 0.42 per cent, at 3,908.61, and the Nasdaq Composite was up 74.50 points, or 0.70 per cent, at 10,710.15.

Broadcom Inc fell 3.3 per cent on a report that Apple Inc plans to replace the former’s chip from its devices with an in-house design in 2025.

Advancing issues outnumbered decliners by a 1.32-to-1 ratio on the NYSE and by a 1.75-to-1 ratio on the Nasdaq.

The S&P index recorded 1 new 52-week high and no new lows while the Nasdaq recorded 27 new highs and 14 new lows.