Wall Street rebounded after four days of declines and closed with gains

Wall Street closed with significant gains after four days of declines. He S&P500 It rose 0.5% after alternating modest gains and losses throughout the day. The industry average Dow Jones increased by 0.4%, while Nasdaq advanced composite by 0.8 percent.

The bone technology stocks helped lead the gains after Nvidia reported better-than-expected results last quarter. Its shares rose 14.1% after it also announced upcoming earnings forecasts that beat some analysts’ expectations. He cited the revival of the strength of video games and the demand for artificial intelligence products.

This is a turnaround for high-growth and technology stocks, which have recently suffered from concern about rising interest rates. They are seen as among the most vulnerable as the Federal Reserve hikes rates in hopes of stamping out inflation.

High rates hurt investments considered riskier, more expensive, or whose highest growth is further in the future. They also increase the risk of recession because they slow down the economy.

After surging in January, stocks hit a wall this month on concerns inflation is not cooling as quickly or as easily as expected. A long list of reports showed that the economy is doing better than expected.

Although this raised hopes of avoid a recession in the short term, it also forced a recalibration of Wall Street forecasts for how much the Federal Reserve will raise interest rates and how long it will hold them.

The latest economic data released on Thursday also hinted at an economy strong enough to prompt the Fed to continue its rate campaign. The fear is that a strong economy could fuel upward pressure on inflation.

Last week, fewer workers applied for unemployment benefits than expected, another sign that the labor market it continues to hold despite the fastest rate hike in decades.

According to another report, the growth of the US economy was likely a little weaker in the last three months of 2022 than previously expected. But it still grew at an annual rate of 2.7%.

Sam Stovall, chief investment strategist at CFRA Research, said stronger economic data dating back to this month’s jobs report prompted him to add another rate hike to his forecast ahead of the Fed. don’t take a break. He also extended the time he thinks it will take the S&P 500 to reach its target of 4,575 points. Instead of thinking it might happen at the end of this year, He thinks it could be within 12 months.

“The bond market has been rather bearish since the beginningassuming inflation would be higher for longer, that we have a recession probability,” Stovall said.

“Our belief is that this is unlikely to be a repeat of the Great Recession. In terms of timing, it could be quite similar to the 2001 recession. It could end up being quite short, 14 months into the “bear market” for stocks.

Wall Street’s growing expectations for the Federal Reserve became more apparent in the bond market, where Treasury yields soared this month. On Thursday they loosened up a bit and eased the pressure on the title. The yield on the 10-year Treasury note, which helps fix rates on mortgages and other large loans, fell to 3.88% from 3.93% on Wednesday.

Earlier this week, it topped 3.95% on its run to its highest level since November.

(With AP information)

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