Stocks rise on Wall Street. Bond yields increase sharply for the second day in a line. This reflects the Federal Reserve’s expectation of a more aggressive interest rate hike. The central bank is moving to curb the highest inflation in decades. The 10-year treasury interest rate rose to 2.38 percent from 2.30 percent at the end of Monday. Interest rates affect interest rates on mortgages and other consumer loans; It was 2.14 percent at the end of Friday.
Yields on bonds and stocks are rising after the chairman of the Federal Reserve said the central bank is ready to raise interest rates more aggressively in the fight against inflation if needed. Powell said the Fed would raise its target short-term interest rate by half a point at several Fed meetings if necessary. Strategists estimate that investors may feel that the Fed is taking a more proactive approach in the early period as it will not have to stop breaking later.
The S&P 500 rose to 4,511.61, for a total of 50.43 points. The Dow fell to 34.807.46, with a total of 254.47 points. The Nasdaq added 14,108.82 points, for a total of 270.36 points. Small-company stocks also returned. The Russell 2000 Index rose to 2,088.34 and rose 1.1 percent to 22.41 points.
Concerns about rising inflation and slowing economic growth in 2022 have weighed on stocks. However, last week’s rally helped reduce some of the S&P 500 benchmark losses for the year. The index has now fallen 5.3 percent. Markets were chaotic. Wall Street is adapting to slowing economic growth as federal spending on various stimulus measures has disappeared. According to experts, this is quite normal. However, this does not feel normal as the last few years have been solid.
Last Wednesday, the central bank announced a quarterly rate hike. This was the first interest rate increase since 2018. The Fed has not raised its benchmark interest rate by half a point since 2000.
It is worth noting that investors’ concerns about the persistently rising inflation have worsened due to the Russian war in Ukraine. Energy and commodity prices were already high; Demand exceeded supply amid the global economic recovery. However, the conflict has further pushed up oil, wheat, and other fees. Rising raw material costs and shipping problems have made the operation of the business more expensive. Many of these costs were passed on to consumers. Consequently, higher prices for clothing, food, and other goods may lower costs and slower economic growth.
Like other companies that rely on consumer spending, shares of technology and communications gained a large percentage of earnings on the S&P 500. Apple grew 2.1 percent. Twitter added 2.6 percent. Nike rose 2.2 percent after reporting surprisingly good financial results for the third quarter. Energy supplies have shrunk due to falling oil prices.
Banks helped boost the market. Bond yields continued to rise. Higher bond yields allow banks to charge a more lucrative interest rate on loans. Bank of America grew by 3.1 percent. JPMorgan Chase added 2.1 percent.
US benchmark crude oil prices fell 0.3 percent. They were fixed at $111.76 per barrel. International Brent crude was up 0.1 percent at $115.48 a barrel. European markets have grown widely. Asian markets closed higher overnight. Investors will soon start preparing for the next round of corporate earnings accounts. The current quarter is approaching the end of March. This can provide a clearer picture of how industries continue to increase costs.
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