(Reuters) - Wall Street opened higher on Wednesday as rising expectations of a December interest rate hike powered financial stocks, with focus also on President Donald Trump’s long-awaited tax plan.
Lawmakers should expect a “very, very powerful document” that would cut taxes “tremendously” for the middle class, Trump said on Tuesday. If passed, the plan would be the president’s first significant legislative win since taking office in January.
“The market really would like to see something positive done. And, right now, tax reform is the only positive thing out there,” said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts.
“If they manage to get through to a revenue neutral plan, that is going to be received positively, it will make it that much easier to pass.”
Shares of big banks, including Bank of America, JPMorgan and Goldman Sachs, were up about 1.5 percent, after Federal Reserve Chair Janet Yellen said it would be “imprudent” to keep rates on hold until U.S. inflation hit the 2 percent target.
Traders now see an 81.4 percent chance of a December rate hike, compared with 71.4 percent a week ago, according to CME Group’s FedWatch tool.
Commerce Department data showed new orders for key U.S.-made capital goods increased more than expected in August and shipments maintained their upward trend, pointing to underlying strength in the economy.
At 9:36 a.m. ET (1336 GMT), the Dow Jones Industrial Average was up 74.86 points, or 0.34 percent, at 22,359.18, the S&P 500 was up 10.28 points, or 0.41 percent, at 2,507.12 and the Nasdaq Composite was up 46.66 points, or 0.73 percent, at 6,426.83.
Nine of the 11 major S&P indexes were higher, led by a near 1 percent gain in the financial index.
Technology index also gained 0.88 percent, lifted by a 0.9 percent gain in Apple
Nike slipped about 4.5 percent and was the biggest drag on the S&P and the Dow, after the company posted its slowest quarterly sales growth in nearly seven years and said it expected a further drop in revenue from North America.
Micron Technology jumped 7.34 percent after the company reported a better-than-expected profit and forecast results above estimates.
Fed Board Governor Lael Brainard and St. Louis Fed Chief James Bullard are expected to make appearances later in the day.
Advancing issues outnumbered decliners on the NYSE by 1,775 to 798. On the Nasdaq, 1,747 issues rose and 565 fell.
Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva
