NEW YORK (AP) — Stocks are opening lower on Wall Street Thursday but are still holding on to sizable gains for the week. Traders are turning cautious as oil prices surge again, pushing U.S. benchmark crude up 7% and back above $100 a barrel. That’s a worrisome sign for inflation, which was already a major concern for markets even before Russia’s invasion of Ukraine three weeks ago. The S&P 500 lost 0.2% in the early going. Treasury yields eased back a day after rising sharply as the Federal Reserve raised its benchmark interest rate for the first time since 2018.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
NEW YORK (AP) — Wall Street pointed toward a lower open bell Thursday, one day after the Federal Reserve announced its first interest rate hike since 2008 in an effort to combat surging prices.
Futures for the S&P 500 and the Dow Jones Industrial Average both edged 0.3% lower following another big day of gains in Asia after China promised support for its real estate and internet industries.
Oil prices rose almost $5 per barrel, once again approaching the $100 per barrel.
All major U.S. indexes rose Wednesday after the Fed raised its short-term lending rate by 0.25 percentage points, a widely anticipated move but less than the 0.5 percentage point hike advocated by some officials.
“Far from choking off growth, the start of the Fed tightening cycle seems to have been greeted warmly,” Chris Turner and Francesco Pesole of ING said in a report. “Investors are cheering measures to address high inflation.”
In midday trading, the FTSE 100 in London lost 0.1%, the DAX in Frankfurt sank 0.6% and the CAC 40 in Paris shed 0.2%.
The Bank of England was expected to raise its key interest rate Thursday for the third time since December as it pushes ahead faster than other central banks in combating a global wave of inflation fueled by soaring energy prices.
On Wednesday, the Dow added 1.4%, the S&P 500 rose 2.2% and the Nasdaq composite gained 3.8% for its biggest daily gain in 16 months.
In Asia, the Hang Seng rose to 21,501.23, adding to the previous day’s explosive 9.1% gain.
The Nikkei 225 in Tokyo advanced to 26,652.89 and the Shanghai Composite Index gained 1.4% to 3,215.04.
Asian markets were buoyed by Beijing’s promise Wednesday to “invigorate the economy” by supporting the struggling real estate industry, internet companies and entrepreneurs who want to raise capital abroad.
Chinese leaders announced no detailed initiatives but appeared to be trying to rebuild private sector confidence after anti-monopoly, data-security and anti-debt crackdowns caused stock prices to plunge.
The Kospi in Seoul was 1.3% higher at 2,694.51 and Sydney’s S&P-ASX 200 added 1.1% to 7,250.80.
India’s Sensex gained 1.9% to 57,873.54. New Zealand and Southeast Asian markets also gained.
The Fed, in a move officials discussed in advance, is trying to cool inflation that is at a four-decade high by gradually withdrawing ultra-low interest rates and other stimulus that boosted share prices.
Other central banks also are preparing to withdraw stimulus they poured into the global economy after the coronavirus pandemic struck.
That is fueling anxiety among investors about economic growth, which also faces threats from Russia’s war on Ukraine, coronavirus outbreaks in China, soaring oil prices and uncertain global consumer demand.
Forecasters expect as many as seven U.S. interest rate hikes this year.
Fed chairman Jerome Powell said that before the Russian invasion of Ukraine he expected inflation to stabilize in the first quarter of this year. He said he now believes inflation will come down in the second half.
In energy markets, benchmark U.S. crude added $4.74 to $99.78 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.40 to $95.04 on Wednesday. Brent crude, the price basis for international oils, gained $5.16 to $103.18 per barrel in London. It declined $1.89 the previous session to $98.02.
Oil prices jumped in late February over concern President Vladimir Putin’s war on Ukraine might disrupt supplies from Russia, the second-biggest exporter.
The dollar declined to 118.63 yen from Wednesday’s 118.69 yen. The euro advanced to $1.1054 from $1.0940.
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