Wall Street set to open higher ahead of two-day Fed meet By Reuters

© Reuters. FILE PHOTO: A man walks a dog in the shade past the New York Stock Exchange (NYSE) during hot weather in New York

By Medha Singh and Devik Jain

(Reuters) – Wall Street’s major indexes were set to open higher on Tuesday as upbeat data from China revived optimism around an economic rebound, while investors looked for more stimulus from the Federal Reserve as the central bank kicks off a two-day meeting.

In its first policy meeting since Fed Chair Jerome Powell announced a more accommodative stance on inflation, the central bank could switch its Treasury purchases toward more long-dated debt to keep long-term yields low, some strategists said.

Expectations from the Fed have increased amid a stalemate in talks for fiscal relief and a sharp pullback in heavyweight technology stocks earlier this month that brought Wall Street’s dramatic stimulus-fuelled rally to a halt.

“The market is getting a tailwind from expectations the Fed will continue to keep interest rates historically low,” said Sam Stovall, chief investment strategist at CFRA in New York.

“It makes the intrinsic value models point to very high returns for the stock market in the year ahead.”

U.S. stocks rebounded sharply on an active merger Monday, with signs of progress in developing a coronavirus vaccine also boosting demand for risk assets.

On Tuesday, data showed China’s industrial output accelerated the most in eight months in August, while the country’s retail sales grew for the first time this year, lifting Asian and European stocks.

Later in the day U.S. data is likely to show industrial production slowed in August.

Among stocks, Apple Inc (O:) rose 1.8% in premarket trading ahead of a virtual product launch, where it is expected to unveil updated watches and iPads, but no iPhones.

Tesla Inc (O:) jumped 4.2%, rising for the fifth day, as data from auto consultant LMC Automotive showed the electric-vehicle maker’s China car registrations rose month over month in August.

At 8:03 a.m. ET, were up 162 points, or 0.58%. S&P 500 e-minis were up 23 points, or 0.68%, and were up 121.5 points, or 1.08%.

Carnival Corp (N:) dropped 2.8% after it warned of a quarterly loss of $2.9 billion, as the COVID-19 pandemic brought the cruise industry to a virtual standstill.

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