New York: Wall Street rose on Wednesday due to volatile trade. Investors saw the imminent end of ultra-loose US monetary policy as a vote of confidence in the economy, while Treasury yields for two years were tightened offshore.
Indeed, the Federal Reserve Board suggested on Wednesday that it could begin to reduce its support for the US economy during times of crisis. That high inflation can last longer than previously thought.
General optimism about economic growth helped the S & P 500 reverse losses later in the day to reach 0.30%, but the Nasdaq Composite surged 0.73% and the Dow Jones Industrial Average averaged 30 stocks. It ended flat.
The Pan-Europe STOXX 600 Index rose 0.70% and MSCI’s global equity gauge rose 0.48%.
Earlier figures showed that the US consumer price index rose 0.4% last month, above the expected 0.3%.
Some investors are worried that accelerated inflation, exacerbated by soaring oil prices, could slow economic growth, cause stagnation and cause “stagflation,” but JP Morgan analysts Claimed on Wednesday that such concerns were “exaggerated.”
“Sustainable inflation suggests that we are still in a hot economy and may encourage the Fed to move faster,” said an analyst at Bank of America.
“Historically, the stock market was strong during periods of high oil prices, especially after the crisis,” analysts said, with investors in energy, materials, industry and financial sector equities. Recommended to allocate more cash compared to the sector of. investment.
Monetary tightening policy bets have flattened the US yield curve.
The Treasury yield jumped to 0.394% over the two years, the last level seen in March 2020, but dropped to 0.36%. Benchmark 10-year yields fell from 1.58% late Tuesday to 1.5403%.
As a result, the Treasury yield difference between 10 and 2 years was about 118 basis points, the lowest in more than 2 weeks.
A flatter yield curve reduces the profitability of banks and puts pressure on bank stocks.
JPMorgan Chase & Co shares fell 2.6% on the day, despite higher-than-expected earnings in the third quarter.
The dollar, which benefited from a bet that US monetary tightening policies would make it more attractive as a high-yielding currency, took a breather on Wednesday.
The dollar index fell 0.42% to 94.033 from its first high of 94.563 in a year the day before. The weaker dollar raised the euro by 0.56% from its nearly 15-month low to $ 1.15945.
The Japanese yen, which hit a three-year low against the dollar, also rebounded, rising 0.23% to 113.27 yen per dollar.
Weeping oil prices have also paused as some investors questioned whether inflation and other supply chain problems would weigh on economic growth and ultimately energy demand.
US crude fell 0.15% to $ 80.52 a barrel and Brent to $ 83.27, down 0.18% that day.
Gold was usually seen as a hedge against inflation and shined as the weaker dollar gained strength.
Spot gold rose 1.9% to $ 1,792.91 an ounce. US gold futures rose 1.92% to $ 1,792.00 an ounce.
(Additional report by Alun John of Hong Kong and Sujata Rao of London, edited by Nick Zieminski and Rosalba O’Brien)
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US stocks bounce off with economic optimism.Dollar pauses rally
Source link US stocks bounce off with economic optimism.Dollar pauses rally