Stocks rally and oil edges up as Fed comments ease September hike fears

Markets rallied and oil prices inched higher on Friday after comments from US Federal Reserve officials tempered investor fears of an interest-rate increase in September, according to IOL.

Fed comments calm rate-hike jitters

According to IOL, remarks from New York Fed boss John Williams and Fed governor Christopher Waller helped ease concerns that the central bank would deliver a policy rate increase at its September meeting.

“There’s no clear signs right now whether monetary policy currently is sufficient to make sure we bring inflation back to target in the next year or two, or whether we would need to see further action to do that,” Williams told CNBC. “The (inflation) data recently have been encouraging towards that.”

Waller said: “My decision on the appropriate stance of policy will be heavily influenced by what we learn about August inflation. If there is continued progress toward our two percent goal, then I am willing to support holding the policy rate at its current level. But if inflation comes in hot, I would consider a rate hike.”

Market moves and lingering risks

IOL reports that stocks rose and government bond yields held their earlier losses after the comments. All three main US indexes ended the day higher, with the Dow and Nasdaq adding more than one percent.

Investors were also preparing for upcoming US data, including non-farm payrolls due later Friday and the consumer price index next week, which analysts view as important for the Fed’s path.

Oil and geopolitical tensions

Oil prices ticked higher on the day. IOL notes markets had been rattled earlier in the week after crude surged roughly 10 percent amid a flare-up in the Middle East; the report said the United States and Iran exchanged fire following that escalation.

On Friday morning, Brent North Sea Crude was trading at $95.98 per barrel, while West Texas Intermediate was cited at $91.91 per barrel in the IOL report.

Global markets and currencies

IOL also recorded gains across Asian markets, with Hong Kong up more than two percent and Seoul up more than one percent. Other markets named as higher included Tokyo, Shanghai, Singapore, Wellington, Jakarta and Taipei.

The report said the yen was around 155.90 per dollar, after strengthening from about 160.40 earlier in the week amid expectations for a Bank of Japan rate move.

Key market figures cited by IOL

• Nikkei 225: up 0.9 percent at 64,769.74
• Hang Seng: up 2.2 percent at 25,765.02
• Shanghai Composite: up 0.8 percent at 3,974.99
• Dollar/yen: around 155.90
• West Texas Intermediate: $91.91 per barrel
• Brent North Sea Crude: $95.98 per barrel
• Dow (New York): up 1.2 percent at 53,686.11 (close)
• FTSE 100 (London): up 0.7 percent at 10,831.51 (close)

According to IOL, markets reacted to a mix of central-bank guidance, geopolitical developments and the prospect of key US economic data that could shape policy decisions in the weeks ahead.