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Last Friday, Wall Street had its worst day in months.
Angels Vice/AFP via Getty Images
Stocks rebound on a quiet day before Labor Day Tuesday as markets digest the recent slump caused by the Federal Reserve. Help cool interest rates and energy prices.
Soon after opening, a file
Dow Jones Industrial Average
It offers 68 points, or 0.2%. The
Standard & Poor’s 500
rose 0.2% and
Nasdaq Composite
Gained 0.4%.
“Stock markets rebounded on Tuesday after two tough weeks as investors became concerned about the economic impact of the tightening,” wrote Craig Erlam, chief market analyst at Oanda.
It’s been a really tough few weeks. The S&P 500 comes into Tuesday just over 6% off its mid-August peak after a summer rally, with weakness driven by Fed Chair Jerome Powell’s emphatic speech that put hopes of turning the Fed to bed once and for all (hopefully). ). The central bank is fighting inflation.
The latest anger from the central bank came from Minneapolis Fed President Neil Kashkari, who told Bloomberg Monday that he was “happy” to see Powell Jackson Hole’s speech in which he received a stock market sell-off. Kashkari said it is a sign that investors understand how seriously the Fed is committed to bringing inflation down to 2%.
While this has brought prices close to multi-year peaks, they do not go beyond those levels. The two-year Treasury yield is trading at 3.45%, near its highest level in the year. With US interest rates halting their recent rally, the dollar faltered, too. in 108,
us dollar index,
They are also slightly below their multi-decade high, but lower rates in the US make the country’s fixed income less attractive.
A pause in prices and the dollar is helping the stock market recover on Tuesday. “Stock futures are enjoying a strong oversold bounce this morning with both Treasury yields and the dollar index pulling back from their recent highs,” Sevens Report’s Tom Essaye wrote.
In line with the pause rates, inflation may indeed calm down for good.
The price of Dutch TTF gas futures fell by 2% in the past few hours on news that the European Union wants to intervene to lower the price of gas. The price of West Texas Intermediate crude also fell more than 2% to below $95 a barrel.
Andrew Brenner of Natalian Securities writes that this helps stocks rise.
Any potential bounce will be tested on Friday. That’s when the Bureau of Labor Statistics releases its August employment report. Economists expect 318,000 jobs to be added, which will be down from 528,000 in July. A cooled job market could be a good sign for the stock market because it could mean the Fed can slowly take its foot off the brake.
“Employment is key to what the markets will do on Friday,” Brenner wrote.
It’s the world of bad news again.
Here are some stocks on the go on Tuesday:
Baidu
(Stock ticker: BIDU) It fell 3% after the Chinese internet giant reported earnings and revenue ahead of Wall Street expectations. The group posted earnings of $2.36 per share on revenue of $4.4 billion in the three months to the end of June, sharply exceeding analysts’ estimates of earnings of $1.54 per share from $4.3 billion in revenue.
bed bath behind
(BBBY) is up 11% a day before investors update.
the difference
(GPS) stock gained 4.8% after being upgraded to Equal Weight from Underweight at Barclays.
Bindudu
PDD stock rose 1.5% after being upgraded to Buy from Hold at HSBC.
American outdoor brands
(AOUT) AOUT stock is up 17% after being upgraded to Buy from Neutral in B. Riley Securities.
MakeMyTrip
(MMYT) stock gained 1.9% after being upgraded to Buy from Neutral on Bank of America.
Write to Jacob Sonenshine at jacob.sonenshine@barrons.com and Jack Denton at jack.denton@dowjones.com