Stocks open higher on Wall Street after two-day drop

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NEW YORK — Stocks open slightly higher on Wall Street after a two-day slump as investors fear high interest rates will go away anytime soon as the Federal Reserve battles inflation. Best Buy rose sharply at the start of Tuesday after reporting results for its latest quarter that were much better than analysts had expected. This helped push up the stock prices of other retailers. Energy companies fell along with the price of crude oil. The S&P 500 rose 0.2% in the first few minutes of trading, and other major indexes rose as well.

THIS IS A BREAKING NEWS UPDATE. AP’s previous story follows below.

NEW YORK — Wall Street was poised to rebound on Tuesday after two days of widespread losses stemming from the Federal Reserve’s pledge last week to fight inflation by keeping interest rates high.

Dow Jones industrial futures jumped 0.6% and benchmark S&P 500 index futures rose 0.7% after falling 0.7% on Monday. The S&P’s 3.4% drop on Friday was its biggest one-day loss in two months.

Markets have been choppy since Federal Reserve Chairman Jerome Powell indicated on Friday that the U.S. central bank would stick to a rate-hike strategy to quell inflation, which is at its highest level in several years. decades. That seemed to quell speculation that the Fed might relax amid signs of slowing economic activity.

Falling stock markets and weak consumer spending “are not enough to deflect the Fed from its tightening agenda,” ING’s Chris Turner said in a report.

On Monday, the Dow Jones fell 0.6% and the Nasdaq composite fell 1%.

Investors will also be watching a consumer confidence report on Tuesday and data from the Labor Department on July job openings.

By midday, the DAX in Frankfurt gained 1.8% and the CAC 40 in Paris gained 1.1% while the FTSE 100 in London edged up 0.1%.

In Asia, the Shanghai Composite fell 0.4% to 3,227.22 and the Hang Seng in Hong Kong was down 0.4% to 19,949.03.

The Nikkei 225 in Tokyo gained 1.2% to 28,217.36 after July’s official unemployment rate held steady and the labor force participation rate, or share of age population to work who is employed, remained at a record high.

Seoul’s Kospi gained 1% to 2,450.93 and Sydney’s S&P-ASX 200 gained 0.5% to 6,998.30.

The Indian Sensex advanced 2% to 59,139.81. New Zealand and Southeast Asian markets also grew.

The Monday sale was widespread. Tech and healthcare stocks were the biggest decliners. Energy and utilities stocks rose.

Investors fear that rate hikes by the Fed and by central banks in Europe and Asia will derail global economic growth.

Fed officials point to the strength of the US labor market as evidence that the world’s largest economy can tolerate higher borrowing costs. Some acknowledge that a recession is possible, but say it might be necessary to extinguish runaway inflation.

The Fed has raised interest rates four times this year. The bottom two were 0.75 percentage points, three times his usual margin.

Some investors hoped that the Fed would relax if inflation subsided. This sentiment led to a rally in equities in July and early August.

Investors are expecting another big hike at the Fed’s September meeting, although the likelihood of such a hike is lower after weaker-than-expected retail sales in July.

The Fed’s favorite inflation gauge slowed last month, while other data showed consumer spending slowed. Wall Street will receive several more economic updates this week.

In energy markets, benchmark U.S. crude fell $2.89 to $94.12 a barrel in electronic trading on the New York Mercantile Exchange. The contract climbed from $3.95 on Monday to $97.01. Brent crude, the price basis for international trade, fell $2.92 to $101.01 a barrel in London. It jumped from $4.10 the previous session to $105.09.

The dollar fell to 138.25 yen from 138.83 yen on Monday. The euro fell from 99.92 cents to $1.0030.

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