Wall Street had snapped a three-day losing streak on Wednesday, buoyed by strong gains in energy stocks, but closed the session off intraday highs as markets were cautious about how the Fed planned to curb inflation in a scenario of growing concern about the slowdown in world growth.
“People are gradually coming back into the market with the assumption that a lot of the bad news has already been priced in,” said Brian Vendig, president of MJP Wealth Advisors.
Chairman Jerome Powell’s speech, scheduled for today, will be scrutinized for any indication that an economic slowdown could alter the Fed’s strategy and whether the central bank can achieve a “soft landing” for the economy.
Data for the day showed the US economy contracted at a more moderate pace than initially thought in the second quarter as consumer spending offset some of the burden from the slowing pace of accumulation. of inventories, dispelling fears of a recession.
Traders see a slightly higher chance of a third 75 basis point hike by the Fed at its policy meeting next month, compared to a smaller 50 basis point hike.
Kansas City Fed President Esther George said it was too early to predict how much the central bank would raise interest rates next month as key reports on inflation and the labor market were yet to come.
Meanwhile, the president of the St. Louis Fed, James Bullard, said yesterday that he expects high inflation to be more persistent than many expected and that interest rates are not yet high enough to begin to reduce pressures. about prices.
For their part, technology actions contributed to the rise of the New York Stock Exchange. Nvidia rose after the graphics chip maker provided a weaker-than-expected quarterly forecast, which many investors saw as a sign the worst of the sales slump may be over. Apple, Amazon and Alphabet, which owns Google, also rose, contributing substantially to the Nasdaq’s rise.
Source: Ambito
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