US open: Stocks rise despite hawkish Fed speakers

US stocks gained on Monday as investors seemed unfazed by hawkish statements from Federal Reserve officials and a worse-than-expected manufacturing report.

At 1516 BST Dow Jones Industrial Average rose 0.14%, the S&P 500 increased 0.4% and the Nasdaq advanced 0.32%.

St Louis Federal Reserve president James Bullard said on Monday that the relatively tight labour market in the US may place upward pressure on inflation, strengthening the case for higher interest rates.

“By nearly any metric, US labour markets are at or beyond full employment," said Bullard in notes for a speech given in Beijing, China.

Fellow Fed policymaker Eric Rosengren said in an interview with the Financial Times, published on Monday, that the US economy was displaying the conditions needed for a 25 basis point interest rate hike at the 14-15 June meeting.

The Boston Fed president, who two weeks ago said rate hikes should resume said: "I want to be sensitive to how the data comes in, but I would say that most of the conditions that were laid out in the minutes, as of right now, seem to be...on the verge of broadly being met.”

Meanwhile, San Francisco Fed chief John Williams said three or four interest rate hikes over the course of 2017 was also "about right", Reuters reported.

In economic data, Markit’s flash US manufacturing purchasing managers’ index fell to 50.5 in May from 50.8 in April. This is only a touch above the 50 mark that separates contraction from expansion and below the 51.0 reading expected by economists.

Chris Williamson, chief economist at Markit, said: “The weak manufacturing PMI data cast doubt on the ability of the US economy to rebound from its disappointing start to the year in the second quarter.”

A drop in oil prices also failed to pull down US equities. A strong dollar and signs that the global crude supply glut continues sent crude prices lower with West Texas Intermediate down 0.70% to $48.07 per barrel and Brent down 1.2% to $48.14 per barrel at 1527 BST.

The dollar rose 0.13% against the pound, increased 0.22% against the euro but fell 0.68% against the yen.

The yen strengthened after official data showed a surprise trade surplus in April for Japan. Japan’s trade surplus came in at 825.5bn yen, well above the market forecast of 535bn yen.

On the company front, Boeing Co. rallied after Vietnamese carrier VietJet Aviation JSC said on Monday that it had signed a $11.3bn deal to buy 100 planes from the US plane maker.

Monsanto Co. gained after German pharmaceutical and chemicals group Bayer AG said it will buy the US agrochemicals company for $62bn.