NEW YORK, Nov 2 — Wall Street’s main stock indexes rallied today on hopes that the US Federal Reserve had reached the end of its tightening campaign, while a raft of upbeat corporate updates added to the bullish mood.

The Fed held interest rates steady on Wednesday as expected, and while Chair Jerome Powell left the door open to further tightening he also acknowledged the impact of a recent surge in bond yields on the economy.

The comments, which were perceived to be dovish, sent US Treasury yields tumbling, with the benchmark 10-year yield hitting near three-week lows.

"Our base case is that the Fed is done, but that they will take time to cut rates,” said Raphael Olszyna-Marzys, international economist at J Safra Sarasin.

"There’s a decent possibility that they will have to do more (hikes), but this is not how the market is seeing it for the moment.”

All three major stock indexes touched their highest level since October 19.

Mega-cap growth stocks including Microsoft, Nvidia, Alphabet and Tesla rose between 0.2 per cent and 3.9 per cent.

All 11 major S&P 500 sectors were trading higher, with real estate and consumer discretionary leading gains.

Traders pared back the risk of a December hike to about 20 per cent and a January move to 25 per cent, according to the CME Group’s FedWatch tool. They have also priced in a 70 per cent chance that the tightening is over.

On the earnings front, Qualcomm climbed 5.9 per cent after the chip designer forecast first-quarter sales and profit above Wall Street estimates as a slowdown in smartphone sales eases.

PayPal advanced 3.9 per cent as the payments giant raised its full-year adjusted profit forecast.

Starbucks jumped 9.4 per cent after fourth-quarter results beat estimates, while data analytics firm Palantir Technologies rose 18.8 per cent on forecasting quarterly revenue above estimates.

Moderna dropped 10.5 per cent after lowering its 2023 Covid-19 vaccine sales forecast. Drugmaker Eli Lilly jumped 6.6 per cent after beating quarterly sales estimates.

Apple’s shares advanced 1.2 per cent ahead of its quarterly numbers due after markets close on Thursday.

At 9.38am ET, the Dow Jones Industrial Average was up 307.02 points, or 0.92 per cent, at 33,581.60, the S&P 500 was up 51.87 points, or 1.22 per cent, at 4,289.73, and the Nasdaq Composite was up 172.71 points, or 1.32 per cent, at 13,234.18.

The Cboe Volatility index, also known as Wall Street’s fear gauge, touched a three-week low.

US equities have kicked off November on a brighter note following a bruising October marred by fears of higher-for-longer interest rates and geopolitical tensions.

Meanwhile, data showed the number of Americans filing new claims for unemployment benefits increased moderately last week as the labor market continues to show few signs of a significant slowdown.

The main data point of the week will be the October non-farm payrolls report on Friday, which will offer more clarity on the state of the labor market.

Advancing issues outnumbered decliners by a 8.67-to-1 ratio on the NYSE and by a 4.50-to-1 ratio on the Nasdaq.

The S&P index recorded five new 52-week highs and six new lows, while the Nasdaq recorded 19 new highs and 47 new lows. — Reuters