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New York Post
Dow jumps over 700 points before giving back gains as Wall Street rebounds after Monday’s bloodbath
By Reuters,
11 hours ago
Stocks ended sharply higher on Tuesday, ending a three-day skid, as investors jumped back into the market a day after a dramatic sell-off , as recent comments by Federal Reserve officials eased US recession worries.
The Dow jumped more than 700 points in intraday trading before paring gains. After losing more than 1,000 points on Monday, the blue-chip index finished with a gain of nearly 300 points, or 0.8%, to close at 38,997.66.
The S&P 500 and Nasdaq each rose 1%. Nvidia jumped 3.8%, giving the biggest boost to the S&P 500 and Nasdaq, a day after falling more than 6%.
All major S&P 500 sectors rose sharply, with technology and real estate up the most.
Central bank policymakers pushed back against the idea that weaker-than-expected July jobs data means the economy is headed for a recession, but they also warned that the Fed will need to cut interest rates to avoid such an outcome.
“The market had just gotten top heavy, but it did reprice a decent amount, particularly the Nasdaq, and people are coming back to the idea that with lower rates it should provide a support for stocks,” said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, NJ.
Traders are pricing in a 75% chance the Fed will cut rates by 50 basis points at its next policy meeting in September, and a 25% chance of a 25 basis point reduction. A 50 basis point cut was fully priced in on Monday, with a 75 basis point cut also seen possible, the CME Group’s FedWatch Tool showed.
Stocks have sold off after weak economic data raised worries of a US recession.
Market concerns were exacerbated as investors wound down yen-funded trades, used to finance acquisition of stocks for years, after a surprise Bank of Japan rate hike last week.
The next big Fed event is Chair Jerome Powell’s speech at the Jackson Hole on Aug. 22-24.
Uber shares rose 11% after the ride-sharing and food delivery provider beat Wall Street estimates for second-quarter revenue and core profit, helped by steady demand for its services.
Caterpillar added 3% after beating analysts’ estimates for second-quarter profit, as higher prices on its larger excavators and other equipment countered moderating demand in North America.
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