- Weekly unemployment demands are rising unexpectedly
- The Fed hints at less aggressive rate hikes
- Samsung’s results drive chip makers
- Rising indices: Dow 1.12%, S&P 1.5%, Nasdaq 2.28%
NEW YORK, July 7 (Reuters) – Wall Street benchmarks ended Thursday, with the S&P 500 and Nasdaq posting their fourth consecutive high closures as traders leaned toward U.S. equities after that the Federal Reserve hinted at a more temperate interest rate program. excursions.
US stock markets have stabilized in July after a brutal sell-off in the first half against the backdrop of rising inflation, the Ukraine conflict and the Fed’s pivot far from the policy of easy money.
The S&P 500 index (.SPX) closed higher in each of the first four sessions of this month, after recording the sharpest percentage drop in the first half since 1970. has had five successive gains so far in 2022.
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The minutes of the central bank’s policy meeting in June, where the Fed raised interest rates by three-quarters of a percentage point, on Wednesday showed a firm reaffirmation of its intention to control prices. Read more
However, Fed officials acknowledged the risk that interest rate hikes will have a “greater-than-expected” impact on economic growth and judged that a 50-75 basis point increase would likely be appropriate for the meeting. July politics.
The less hawkish tone was echoed in comments by Fed Governor Christopher Waller on Thursday. Describing the fears of a recession in the United States as exaggerated, he called for a 50 basis point rise in September. Read more
This sentiment was considered by some to add positions, even in high-growth stocks, that had suffered during the first half of 2022 as investors worried about their prospects in an interest rate environment in increase.
This benefited tech names large and small, with Tesla Inc Heavy Weights (TSLA.O) up 5.5% and Google Alphabet Inc (GOOGL.O) parent company up 3.7%, and Affirm Holdings Inc ( AFRM.O) and Avalara Inc (AVLR.N). ) gaining 17.1% and 16.4%, respectively.
“You’re starting to get the feeling that real money is starting to come back,” said Louis Ricci, chief trader at Emles Advisors.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, USA, June 30, 2022. REUTERS / Brendan McDermid
“There’s no reason why the market can’t go down 30% more, but we think the risk is 30% down, but three or four times up.”
While investors broadly expect the Fed to raise rates by another 75 basis points in July, expectations of the maximum terminal rate next year have dropped significantly amid growing concerns of a global economic slowdown.
Fed fund futures traders are setting the price so that the benchmark rate will reach a high of 3.44% in March. Expectations before the June meeting were that it would increase by about 4% in May. It is currently 1.58%. ,.
On the other hand, a report on Thursday showed that the number of Americans filing new applications for unemployment benefits rose unexpectedly last week and demand for labor is slowing with layoffs which increased to a maximum of 16 months in June. Read more
A closely watched employment report close to Friday is expected to show that non-farm payrolls probably rose by 268,000 jobs last month after rising by 390,000 in May.
The Dow Jones Industrial Average (.DJI) rose 346.87 points, or 1.12%, to 31,384.55, the S&P 500 (.SPX) gained 57.54 points, or 1.50%, to to 3,902.62 and the Nasdaq Composite (.IX9IC.49) rose 57.54 points, or 1.50%. 2.28%, to 11,621.35.
Almost all S&P subsectors were higher, with a 3.5% increase in the energy index (.SPNY) which made it the best performer, as oil and gas companies followed the rise in prices. of crude from the minimum of 12 weeks of the previous day.
The Philadelphia SE Semiconductor (.SOX) index rose 4.5% after South Korea’s Samsung Electronics (005930.KS) earned its second-quarter best profit since 2018, driven by strong chip sales. memory.
The volume on U.S. stock exchanges was 10.44 billion shares, compared to the average of 13.08 billion in the full session of the last 20 trading days.
The S&P 500 recorded 2 new 52-week highs and 29 new lows; the Nasdaq Composite recorded 24 new highs and 57 new lows.
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Report by David French in New York and Amruta Khandekar, Bansari Mayur Karmdar and Devik Jain in Bangalore Edition by Anil D’Silva and Matthew Lewis
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