U.S. stocks rose on Tuesday, with Federal Reserve Chairman Jerome Powell at an upcoming policy meeting to curb inflation, which is currently at its highest level in 40 years. Following the statement that he could offer a big rate hike, he shook off the wobble. ..
what’s happening
The Dow Jones Industrial Average, DJIA, + 0.71%, rose 234 points (0.7%) to 34,787.
S & P 500 SPX, + 1.03%, was 4,505, up 44 points, or 1%.
The Nasdaq Composite Index + 1.77% was 14,074, up 234 points (1.7%).
Stocks stumbled on Monday after Powell said the central bank could offer a 50 basis point or 0.5 percent increase at future meetings, but ended the day well away from the session’s lows. rice field. The Dow fell 0.6%, recording a five-day streak, while the S & P 500 fell slightly and the Nasdaq Composite fell 0.4%.
What is driving the market
Following Powell’s remarks on Monday, Treasury yields surged and expanded on Tuesday. 10-Year Treasury Yield BX: TMUBMUSD10Y was 2.366%, up about 4 basis points after rising to its highest since May 2019 on Monday.
In an interview with Bloomberg Television on Tuesday morning, St. Louis Fed Governor James Bullard said the 50 basis point move should definitely be “mixed” as the Fed raises interest rates. Mr. Bullard opposed at the Fed’s meeting last week, supporting a 50 basis point increase instead of the 25 basis point increase approved by policy makers.
read: Bullard and Waller support a positive policy stance
There are more comments from Federal Reserve Bank officials on Tuesday, including Fed President John Williams.
Mark Hefere, chief investment officer at UBS Global Wealth Management, said Powell is in a mode where the Fed is currently in a mode to fight more subtle inflation for equities, which is bad news for bonds. Said that it shows.
“We still see the path to a market that ends the year higher. There is widespread criticism, but the Fed cannot negotiate the subtle line of lowering inflation without hindering growth. It’s too early to do, “he said in a memo.
In a high degree of uncertainty, Hefere said UBS prefers selected overweight and underweight positions, resulting in an overall neutral allocation to equities. Investors need to be prepared for higher interest rates, taking into account their exposure to US senior loans and equity sectors, which normally outperform in the current environment, such as value equities and finance.
Meanwhile, as President Joe Biden urged US companies to strengthen their cyber defenses against Russia, Russia intensified air and sea attacks across Ukraine.
Edward Moya, senior market analyst in Oanda’s Americas, said:
“Everyone can guess the consequences of this war, but what we know is that the longer the war, the greater the risk of stagflation for the global economy,” he added.
Companies of interest
- Okta Inc. Certification company OKTA said the hacking group is believed to be based in Brazil, but is investigating images that claim to show hacking of internal systems. In a tweet, Okta CEO Todd McKinnon said there was no evidence of any malicious activity currently underway, Barrons reported. Stock prices have fallen 1.5%.
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Alibaba Group Holding Co., Ltd.
BABA, + 12.28%, announced at the end of Monday that it would scale up its share buyback program. China’s e-commerce giant has approved $ 15- $ 25 billion share buybacks. US listed stocks rose 11.6%. Share Nike Co., Ltd.
NKE, + 2.93%, rose 4.1% after the company reported higher-than-expected revenue and sales on Monday.
Other assets
The ICE US Dollar Index DXY, -0.01%, which is a measure of currency against the baskets of six major rivals, fell 0.1%.
Oil futures rose, US benchmark CL.1, -0.36% down 1.3% to about $ 108.50 per barrel, gold futures GC00, -0.42% down 0.5% to close to $ 1,920 per ounce it was done.
Bitcoin BTCUSD, + 3.39%, rose 3.9% to trade near $ 42,700.
The Stoxx Europe 600 SXXP, + 0.85%, rose 0.8%, and the London FTSE 100 UKX, + 0.46%, rose 0.4%.
The Shanghai Composite SHCOMP (+ 0.19%) rose 0.2%, the Hang Seng Index HSI (+ 3.15%) rose 3.1% in Hong Kong, and the Nikkei 225 NIK (+ 1.48%) in Japan rose 1.5%.