The Dow Jones Industrial Average added 1.9%, and the S&P 500 advanced 1.6%. The Nasdaq Composite Index rose 1.1%, despite declines in Tesla, Nvidia and Amazon.com.
Eight of the 11 major S&P 500 sectors were higher in mid-session trading, with financials and energy gaining more than 1% each.
The banking segment rose strongly, buoyed by a 7.2% rise in shares of JPMorgan Chase & Co after the largest US lender by assets raised its outlook for net interest income for 2022.
The battered stocks linked to growth, such as Apple and Microsoft gained 3.4% and 2.7%, respectively, providing the biggest boost to the S&P 500.
U.S. stock indices deepened year-to-date losses last week as gloomy forecasts from Walmart Inc and other retailers added to concerns about rising inflation and its impact on consumers and economic growth.
The benchmark S&P 500 fell more than 20% from its record closing high on Jan. 3 during Friday’s session, poised on the verge of confirming a bear market. The reference now shows a decrease of 17.9% from its closing historical maximum. While the Dow Jones has been down for 8 consecutive weeks, the worst streak since 1932, at the time of the Great Depression.
“I’m not surprised and that’s what you’ll start to see when you’re bouncing off the bottom, it’s an indication that stocks are becoming more attractive,” said Christopher Grisanti, chief equity strategist at MAI Capital Management.
“The more people think that there is going to be a recession, the less they will worry about inflation. If the economy is slowing down (…) the Federal Reserve will not have to raise interest rates as much as before”he explained.
Readings of the second estimate of US Q1 GDP, the PCE price index and April durable goods data are due out this week, likely to provide clues as to how the world’s largest economy is faring. amid the highest inflation in decades.
Minutes from the Fed’s May meeting, due to be released on Wednesday, will be scrutinized for signs of how aggressively the central bank plans to raise interest rates. Money markets are pricing in 50 basis point rate hikes by the Fed in June and July.
Source: Ambito
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