Investing.com – Wall Street traded up to new 2016 highs on Wednesday as bullish sentiment from a dovish monetary policy stance continued to fuel investor appetite, while gains were pared in oil after a report that OPEC had increased production in March.
At 15:43GMT or 11:43AM ET, the Dow 30 rose 85 points, or 0.48%, while the S&P 500 gained 9 points, or 0.42%, and the tech-heavy NASDAQ Composite advanced 21 points, or 0.47%.
With one day left in the month, the Dow was set to not only close the first quarter of 2016 with slight gains, but was also on its way for what would be its biggest quarterly comeback since the fourth quarter of 1933.
After Fed chief Janet Yellen’s dovish speech on Tuesday pushed U.S. stocks to 2016 highs, Chicago Fed president Charles Evans backed her cautious approach to tightening monetary policy on Wednesday and said that he would be surprised if the conditions for a rate hike were met in April.
Investors and economists dialed back their rate hike expectations in wake of Yellen’s dovish outlook, with traders of interest-rate futures now seeing no rate rise before November.
Indeed, fed funds futures traders have revised down the implied probability of a June rate hike to just 28%, and “only” a 71% chance of another rate hike at all this year.
The news continued to take its toll on the greenback on Wednesday as it was driven down against major rivals. The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slumped to its lowest level in more than five months, while the EUR/USD jumped to one-and-half-month highs on the dollar’s weakness.
While black gold also benefited from a cheaper greenback, oil prices jumped further on Wednesday after bullish weekly stockpile data. The U.S. Energy Information Administration said in its weekly report that crude oil inventories rose by 2.3 million barrels in the week ended March 25. Market analysts' expected a crude-stock rise of 3.3 million barrels, while the American Petroleum Institute late Tuesday reported a supply gain of 2.6 million barrels.
Oil prices surged more than 4% after the data was released, though it pared gains on news that OPEC had increased output in March. Specifically, crude futures on the New York Mercantile Exchange gained 0.55% to $38.49 a barrel by 15:45GMT or 11:45AM ET, while Brent oil rose 0.88% to $40.20.
There was also bullish sentiment on the macro front as, U.S. non-farm private employment rose more than expected in March, boosting optimism over the health of the labor market, according to the ADP employment report.
In big market movers after earnings reports, yogawear maker Lululemon Athletica (NASDAQ:LULU) saw shares gain almost 10% after reporting better than expected fourth quarter earnings Wednesday morning.
Shares of fast-food chain Sonic Corp (NASDAQ:SONC) rose more than 4% after reporting a jump in profit late Tuesday, while providing upbeat guidance.