Wall Street determined to continue the rebound after the losses suffered in the last few sessions.
Attention remains vigilant on the trend in Treasury yields, with the ten-year yields which, after moving away from record values since 2010, return to soar above the 3.9% threshold. Rates are flying up to 3.963%, a new high of the last 12 years.
The two-year Treasury rates were more or less stable, at 4.314%, after having jumped in the previous hours to 4.351%, the maximum value since August 2007.
At approximately 16.05 Italian time, the Dow Jones rose by 181 points (+ 0.62%); the S&P 500 advanced 0.80% while the Nasdaq Composite posted a rise of 1.09%.
Wall Street seems to want a recovery, after reporting five consecutive sessions of losses, which made the S&P 500 index slide yesterday to the minimum closing level since 2020. The Dow Jones is back in the bear market phase, after having slipped more than 20% below the tested record value. Not only. The list of 30 industrial stocks closed yesterday at the lowest closing level since the end of 2020. To be precise, the S&P 500 index closed yesterday at 3,655.04, down 1.03%, at the lowest value since. March 14, 2020. The Dow Jones lost 1.11% yesterday (-330 points), slipping to its worst close since November 12, 2020, at 29,260.81, while the Nasdaq Composite fell 0.60% and is down more than 33% from its all-time high of 10,802.92.
Protagonists were the speeches of some members of the Fed who, in general, confirmed all the determination of the US central bank led by Jerome Powell to move forward in its fight against inflation.
Focus in particular on the statements of Loretta Mester, president of the Cleveland Fed who, in a speech delivered at the Massachusetts Institute of Technology (MIT), stressed that “unacceptably high inflation is the key challenge facing the (US) economy. “And that” price stability is necessary to ensure a healthy labor market “.
Mester added that, in the US central bank’s fight against inflation, “further rate hikes will be needed”, explaining that “there will be a need for a tightening phase for some time” and that “the costs would be high if we were unable to act in a determined way “.
A certain nervousness about the risk of going too far with aggressive monetary tightening was expressed instead by Charles Evans, president of the Chicago Fed who, speaking in the CNBC broadcast “Squawk Box Europe”, admitted to having some anxiety about to the risk that the Federal Reserve will raise fed funds rates too quickly in its attempt to tackle inflation.
Evans said he remained “cautiously optimistic” that the US economy could foil a recession, provided no further shocks occur.
“I believe that our estimates, on average, are of maximum rates by March, assuming the absence of further adverse shocks. And if things improve, maybe we could do even less, but I still believe that we will reach those rate peaks “.
Last week, Jerome Powell’s Fed made its third consecutive monetary tightening of 75 basis points, taking US fed funds rates to a record since 2008, in the range of 3% to 3.25%, in order to to defuse runaway inflation.