Stocks on Wall Street are rising as markets open the month trying to shake off a miserable September marred by fears that the Federal Reserve’s aggressive interest rate hikes will plunge the U.S. economy into recession. U.S. Treasury yields fell from their multi-year highs, indicating investor confidence in the economy.
The S&P 500 was up 70 points, or nearly 2%, at 3,655 as of 11:25 a.m. ET. The Dow jumped 614 points, or 2.1%, to 29,375, while the Nasdaq rose 1.4%.
“[T]there are so many moving macro pieces in the world that it’s easy to fall apart. U.S. stock investors should focus on what matters most: earnings, inflation and growth,” Vital Knowledge analyst Adam Crisafulli said in a research note. (Fed move) would be a huge headwind for stocks.”
Lowest level in almost 2 years
In September, the S&P 500 fell for its worst month since the coronavirus pandemic crashed global markets. It enters October at its lowest level since November 2020 and is down more than a quarter since the start of the year.
The Fed has been at the forefront of a global campaign to slow economic growth andjust enough to undermine inflation, but not enough to cause a recession. On Friday, the Fed’s preferred measure of inflation showed it was worse last month than economists had expected. That should keep the Fed on track to hold rates and keep them at high levels, increasing the risk that it will go too far and cause a downturn.
The British pound strengthened and borrowing costs for the UK government fell after Prime Minister Liz Truss’s embattled new government abandoned plans to cut, part of a package of unfunded cuts that triggered turbulence in financial markets and sent the pound to record lows. IN Finance chief Kwasi Kwarteng has abandoned plans to scrap the top 45% rate of income tax paid on earnings above £150,000 ($167,000) a year.
Meanwhile, the stunning and rapid growth of the US dollar against other currencies raises the risk of creating such stress that something will snap somewhere in global markets.
European energy concerns
Europe facesThe IEA said that “natural gas supplies this winter after Russia cut most pipeline supplies could end up competing with Asia for already scarce and expensive liquid gas, which is shipped by ship.
News that major oil producers are planning further output cuts also put upward pressure on energy prices. Oil prices were significantly higher ahead of the OPEC+ meeting this week. The oil cartel is expected to announce production cuts.
U.S. benchmark crude gained $3.39 to $82.88 a barrel in electronic trading on the New York Stock Exchange. It lost $1.74 to $79.49 a barrel on Friday.
Brent crude, the international oil benchmark, rose $3.33 to $88.47 a barrel.
OPEC and allied oil-producing nations, including Russia, slightly cut their supplies to the global economy a month ago, underscoring their discontent as recession fears help depress oil prices.
, the S&P 500 fell 1.5%, while the Dow Jones Industrial Average fell 1.7% and the Nasdaq Composite fell 1.5%. All three fell nearly 3% last week as the Dow slipped into what is considered bear territory, down more than 20% for the year.