Wall Street snapped its three-day losing streak on Wednesday. driven by the strong gains in energy values, but closed the session off intraday highs as markets were cautious about how the Fed plans to curb inflation amid growing concerns about slowing global growth.
“People are gradually coming back to 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.
The president’s speech Jerome Powellplanned for the Friday, will be scrutinized for any indication that an economic slowdown could upset the Fed’s strategy and whether the central bank can achieve a “soft landing” for the economy.
The data from the day showed that 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 slower pace of inventory buildup, allaying 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 are still missing.
For their part, the technology stocks contributed to the rise of the New York stock market. Nvidia rose after the graphics chip maker offered a weaker-than-expected quarterly forecast, which many investors saw as a sign that the worst of the sales slump may be over. Apple, Amazon and Alphabet, owner of Googlealso rose, contributing substantially to the Nasdaq rise.
Source: Ambito
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