U.S. stocks rise after economic reports and easing oil prices
U.S. stocks edged higher Wednesday, recovering from two days of steep swings amid easing oil prices and positive economic reports, according to sources. The S&P 500 increased 0.8% in afternoon trading, aiming to recover most of its losses since the start of the Iran conflict. The Dow Jones Industrial Average added 256 points, or 0.5%, while the Nasdaq composite rose 1.4%.
The market’s gains followed a volatile start, which saw South Korea’s Kospi plunge 12.1%, its worst day in history. Oil prices also stabilized, with Brent crude easing from above $84 per barrel to $81.51, a slight gain of 0.1%. U.S. benchmark crude rose 0.5% to $74.90 per barrel.
Economic data showed signs of strength. One report indicated that growth for U.S. businesses in real estate, finance, and other services accelerated last month at the fastest pace since summer 2022. Additionally, the report noted that prices for these industries are rising more slowly, before the escalation of the Iran conflict. Another report suggested that private-sector employment increased last month, signaling resilience in the labor market ahead of a broader government employment report Friday.
Market analysts remain cautious, citing concerns over the duration of the Iran conflict, inflation fueled by higher oil prices, and declining corporate profits. Despite these worries, some investors see potential for markets to withstand geopolitical shocks, provided oil prices do not spike too high.
Big tech stocks led the gains, with Nvidia rising 1.5% and Amazon increasing 3.3%. Retailers and travel companies also climbed, buoyed by expectations of a resilient economy and stabilizing gasoline prices. Shares of Ross Stores surged 7.5% after strong quarterly results, while Expedia gained 4.1%. Cryptocurrency-related stocks, including Coinbase and Robinhood, also gained as bitcoin’s price recovered above $73,000.
International markets followed suit, with European indexes climbing after sharp declines in Asia. France’s CAC 40 gained 0.8%, and Germany’s DAX rose 1.7%. In contrast, Asia experienced declines, with Hong Kong’s Hang Seng dropping 2% and Japan’s Nikkei falling 3.6%. Bond yields remained steady, with the 10-year Treasury yield increasing slightly to 4.08%.
The economic reports provided some relief for the Federal Reserve, which faces a complex balancing act between controlling inflation and supporting the job market. Higher oil prices threaten to push inflation further, potentially prompting the Fed to keep interest rates high longer. Traders now expect rate cuts to be pushed into the summer, as geopolitical tensions influence monetary policy outlooks.
Source: Original Article
