Stocks closed higher on Wall Street. recovering more of their recent lossesas the countdown approaches zero for a long-awaited speech on interest rates.
The S&P 500 it rose 1.4% on Thursday. The Dow Jones gained 1% and the Nasdaq closed 1.7% higher.
Shares have ranged between Profits and the losses since they suffered on Monday his worst day in months, as traders refrain from making big moves in general. Wall Street’s attention is focused on the economic summit in Jackson Hole, Wyoming, which has been the scene of market-defining Federal Reserve announcements in previous years. The Fed chairman is scheduled to speak on Friday morning.
For its part, a revised reading of the general economy suggested that its spring contraction was not as severe as previously thought. The economy shrank 0.6% on an annualized basis, according to the government’s second preliminary reading, softer than the 0.9% given in his initial estimate.
The 10 year Treasury yieldwhich affects mortgage interest rates, fell to 3.03% from 3.11% on Wednesday.
This helped stocks that tend to benefit more from lower interest rates.such as companies Internet and of technology. Companies whose profits tend to be closely tied to the strength of the economy, such as banks and commodity producers, also helped lead the market.
Telehealth providers came on strong following Amazon shut down its internal telemedicine service for employees. Teladoc gained 2.6%.
On the losing side were several companies that cut their financial forecasts for the year. the software company Salesforce fell 5.1%, and discount retailer Dollar Tree fell 9.7%.
Several retail companies have cut their outlooks recently, even following posting higher-than-expected profits last quarter.. They are struggling with rising inventories and rising costs, while customers are also affected by inflation, especially those with lower incomes.
However, Wall Street’s attention remains focused on Jackson Hole, Wyoming, where economists from around the world meet for an annual symposium.
It has been the scene of several advertisements for the Federal Reserve that have defined the market in the past, and investors expect the Fed chairman, Jerome Powellprovide some clarity tomorrow on the direction of interest rates.
The Fed has already raised rates four times this year in its efforts to rein in high inflation., with most of them bigger than the usual rise, and investors want to hear how it is tilted for future expected rises. Powell will speak in the morning on Friday, and he might also talk regarding the Fed’s moves to kick-start the “money printer” that it used during the pandemic to boost the economy.
Stocks have soared over the summer on hopes the Federal Reserve might be more flexible in its rate hikes. than feared, as investors saw signs that the country’s high inflation might be nearing its peak. The hope was that the Fed might scale back its rate hikes sooner than expected and ultimately not raise rates as much as thought.
But recent comments from a number of Fed officials have made back that narrative, leading to hope for more clarity from Powell on Friday.
(With information from AP)
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