The New York Stock Exchange closed higher Monday on a technical recovery and a bargain hunt after a nightmare week for Wall Street.
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The Dow Jones was up 0.64%, the Nasdaq index was up 0.76% and the broader S&P 500 index was up 0.69%.
The indices opened in the red before oscillating around equilibrium for much of the day, before eventually moving higher.
“Today was bargain hunting,” commented Regent Atlantic’s Andy Kapyrin.
In fact, the Nasdaq locomotives all finished positively after suffering for several days, notably Apple (+2.51%), Meta (+1.18%) or Nvidia (+1.39%).
FedEx (+1.17%) was also searched for on Friday after a profit warning, as was Gap (+4.39%), which had suffered from its split with Kanye West last week.
For analysts at Briefing.com, indices also benefited from a technical recovery, with the S&P 500 reversing its move after flirting with a two-month low on Friday.
Investors are turning their attention to Washington, where the US Federal Reserve (Fed) will open Tuesday’s meeting, which economists are expecting to announce a 0.75 basis point interest rate hike on Wednesday.
“The market is down so much, there are so few people who are bullish on stocks, that there isn’t much room for a nasty Fed surprise and a negative reaction from traders,” Andy Kapyrin said.
Stocks in stable, high-dividend companies should be preferred, he argued. These include Altria (+1.47% Monday), Dow (+0.69%) and JPMorgan Chase (+0.92%).
The day was also marked by a further hike in bond yields in line with the Fed’s dovish rhetoric.
10-year US Treasuries returned 3.51% for the first time in more than 11 years.
The two-year rate, reportedly more sensitive to market expectations of Fed policy, rose to 3.96%, a level that has been busier for almost 15 years.
“We moved quickly from an environment where investors didn’t seem to be paying much attention to what the Fed was saying” to “an appropriate and sporadic response,” according to US Bank Wealth Management’s Bill Merz.
For the analyst, Wednesday’s market will react more to the Fed’s economic forecasts and its members’ forecasts of changes in medium-term interest rates (“dot plots”) than interest rate hikes.
Creative software giant Adobe remained poorly oriented (-1.15% to $296.06), with part of the market believing the $20 billion offered price for the acquisition of collaborative design platform Figma was too high.
Despite the wave of bargain buying, caution remained and the cryptocurrency sector struggled. Coinbase (-5.50%), Applied Blockchain (-3.26%) and Block (-1.82%) paid the price.