US open: Stocks trade higher following Fed-fuelled losses in previous session
Wall Street stocks traded higher at the opening bell for the first full session since the Federal Reserve cut its target interest rates for the first time in more than a decade.
As of 1520 BST, the Dow Jones Industrial Average was ahead 0.45% at 26,985.78, while the S&P 500 was 0.55% firmer at 2,996.67 and the Nasdaq Composite traded 0.97% higher at 8,254.89.
The Dow opened higher on Thursday after shedding 333.75 points in the previous session after the Fed voted to reduce its benchmark interest rate by 25 basis points to a target range of between 2% and 2.25% - the central bank's first cut since December 2008.
Investors, who had largely been expecting such a move, appeared more interested in the comments from chairman Jerome Powell, who said the cut was part of its ongoing work to keep in line with economic conditions and was no guarantee of future cuts.
"We're thinking of it essentially as a mid-cycle adjustment to policy," Powell said, warning markets not to consider the move as the start of rate-cutting cycles as in the past.
"That refers back to other times when the FOMC has cut rates in the middle of a cycle and I'm contrasting it there with the beginning of a lengthy cutting cycle.
"That is not what we're seeing now, that's not our perspective now."
However, later on in the presser, Powell said: "I didn't say this was one and done", prompting some traders to reportedly grumble that they had been wrong-footed by his initial remarks.
Donald Trump took aim at Powell via Twitter, saying the chairman had "let us down" by not clearly signalling more rate cuts.
Powell said the Fed, which operates independently of the White House, would never move rates because of political factors.
Elsewhere, the US and China ended a brief round of trade talks, achieving no real progress towards ending their protracted dispute, as expected.
Chinese Foreign Minister Wang Yi stressed the importance of cooperation with the US following talks with Secretary of State Michael Pompeo.
On the data front, US jobless claims rose by more than expected last week but remained near record low levels.
According to the Department of Labor, initial unemployment claims increased by 8,000 over the week ending on 27 July to reach 215,000 (Barclays: 210,000).
Elsewhere, US construction spending fell at a higher clip than it had in seven months during June, with investments in private construction projects tumbling to a more than 18-month low.
The Commerce Department said construction spending dropped 1.3%, its biggest decline since last November, while data for May was revised up to show construction outlays falling 0.5% instead of the 0.8% previously reported.
Lastly, the Institue for Supply Management's monthly Manufacturing Purchasing Manager Index fell to 51.2 in July from 51.7 - a worse than expected figure than that of the 52 predicted by economists.
ISM's manufacturing business survey committee head Timothy R Fiore said: "Comments from the panel reflect continued expanding business strength, but at soft levels; June was the third straight month with slowing PMI expansion.
"Demand expansion ended, with the New Orders Index recording zero expansion, the Customers’ Inventories Index remaining at a too-low level, and the Backlog of Orders Index contracting for the second straight month. New export orders remain weak."
On the corporate front, General Motors was up 3% after its latest quarterly figures, while DuPont inched ahead in early trade after raising its full-year profit guidance despite warning that sales looked set to fall.
Verizon shares were up 1.38% after the telco giant beat on profit estimates.
Western Union, Petrobas and Pinterest will publish their latest quarterly figures after the close.