Wall Street’s major indices rose Friday after a brutal sell-off on fears of a recession triggered by a series of rate hikes by the Federal Reserve and other major central banks.
Stubbornly high inflation has terrified investors this year as they adjust to the end of the cheap money era, raising concerns about price pressures hurting corporate profits and economic growth.
Despite Friday’s gains, all three major indices were on track for their third consecutive weekly losses, with the benchmark S&P 500 index paced for its worst performance since January.
The Fed raised its key rate by 75 basis points on Wednesday, the largest increase in nearly three decades, while the Bank of England and the Swiss National Bank also hiked borrowing costs.
“Markets will not stabilize until there is a feeling that action by the Fed and other central banks will succeed in not only containing inflation but also avoiding a global recession,” said Kenny Polcari, managing partner at Kace capital. advisors.
“I don’t think it’s a 2007 event again. But based on all the incentives that every central bank around the world has given and now that they’re starting to take the candy out of the candy jar, investors are going to react violently.”
Fed Chair Jerome Powell reiterated the central bank’s focus on bringing inflation back to its target of 2%, while speaking at a conference on the “international roles of the US dollar.”
At 10:08 a.m. ET, the Dow Jones Industrial Average rose 52.58 points, or 0.18%, to 29,979.65, the S&P 500 rose 19.86 points, or 0.54% to 3,686.63, and the Nasdaq Composite rose 129.84 points or 1.22%, at 10,775.94.
Trading is expected to remain volatile due to the expiration of monthly and quarterly options contracts ahead of the June market holiday on Monday.
Eight of the 11 major S&P sectors won. S&P’s energy sector fell nearly 2% and was on track to outperform weekly losses as oil prices took a hit on fears of a global slowdown. Still, the sector has increased by 37% this year due to rising oil prices.
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Revlon Inc rose 80.5% after a news report reported that Indian conglomerate Reliance Industries is considering buying out the cosmetics company in the United States, days after the cosmetics giant filed for bankruptcy.
The number of emerging issues outpaced the number of rejecters by a ratio of 2.63 to 1 on the NYSE and a ratio of 3.85 to 1 on the Nasdaq.
The S&P index recorded one new 52-week highs and 34 new lows, while the Nasdaq recorded two new highs and 92 new lows.