Dow closes more than 400 points higher, Nasdaq snaps 7-day slump as Wall Street shakes off rate hike concerns; European markets close lower as recession fears grow
Stocks rose Wednesday — trying to shake off a three-week slide — as rates and oil prices eased, cooling investor concerns about continued high inflation.
The Dow Jones Industrial Average gained 435.98 points, or 1.40%, to end the day at 31,581.28. The S&P 500 rose 1.83% to 3,979. and the Nasdaq Composite ticked up 2.14% to 11,791.90, breaking a seven-day losing streak.
Stocks rallied as Fed Vice Chair Lael Brainard reaffirmed that the central bank would do what it takes to stifle inflation, while also noting the risks of going too far. Many traders decided to focus on this latter point from her speech.
On Wednesday, the Federal Reserve gave its summary on current economic conditions, known as the Beige Book. The report showed that economic activity was little changed in many regions across the U.S., and that growth outlooks remain weak.
The pan-European Stoxx 600 provisionally ended the day down 0.4%, with oil & gas shedding 2.9% to lead losses. Utilities stocks were the best performing of the day, closing up 2.1%.
Austrian electricity company Verbund jumped 12% by late morning, leading a broad rally for European utilities stocks as the market anticipated potential shifts in regulation to weather the continent’s deepening energy crisis.
At the bottom of the Stoxx 600, French video game manufacturer Ubisoft Entertainment plunged more than 16% after announcing that Chinese conglomerate Tencent had increased its stake in the company, a move seen as reducing the likelihood of a full buyout.
Nomura has cut its forecast for China’s full-year GDP to 2.7%, another downgrade from its previous 2.8% estimate set in August.
The new outlook is based on Nomura’s analysis that found 12% of China’s GDP is affected by Covid controls on a weighted basis, up from 5.3% last week.
Source: CNBC, Investing.com