Positive U.S. economic data largely allayed investors’ recession fears ahead of Thursday’s torrent of economic data, and led to a rebound in stocks following last week’s sharp global sell-off.
Wall Street gets off to a strong start on Thursday, as investors regained confidence in the economy after encouraging data on consumption and employment helped ease concerns about a recession in the north.
The Dow Jones Industrial Average rose 1.4%. The S&P 500 rose 1.1%, marking its sixth consecutive gain. The Nasdaq Composite soared 1.5%.
Retail sales rose 1% in July, far exceeding the Dow Jones estimate for a 0.3% increase. Weekly jobless claims also declined during the week. The data was a boost for investors and a broader market trying to recover from a slump in August linked to concerns about a slowing economy that arose after the disappointing July jobs report on Aug. 2.
After rising 3% this week, the S&P 500 is now less than 3% below its record. All three major U.S. indexes are now trading above their closing levels from Aug. 2, the session before the Aug. 5 global stock market crash that was largely driven by investor concerns about an economic slowdown and the unwinding of a popular hedge fund’s currency operation.
Wall Street: What the market is analyzing
“More data like this could ease concerns that the economy is tipping toward a recession and take pressure off the Fed to cut rates more aggressively than they would like,” said Chris Larkin, managing director of trading and investment banking at Morgan Stanley’s E-Trade.
Encouraging inflation data this week had largely allayed investors’ recession fears ahead of Thursday’s torrent of economic data, and led to a rebound in stocks after last week’s sharp global sell-off.
wall street markets
Reuters
Stocks rose Wednesday after the consumer price index showed a slowing annual inflation rate of 2.9%, the lowest since 2021. That data, along with a key measure of wholesale inflation released Tuesday that rose less than expected, have reassured investors that a soft landing for the economy is back on the table and that the Federal Reserve will likely cut interest rates at the central bank’s September meeting.
Source: Ambito
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