Tuesday, 24 May, 2022
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Stocks bounce after Fed boss calms nerves over rates

Stocks bounce after Fed boss calms nerves over rates

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LONDON: Global stock markets rebounded Friday as fears eased about the pace of interest rate rises in the United States that are aimed at bringing down the country's highest inflation in decades.

Wall Street pushed strongly higher with the Dow climbing 1.6 percent in late morning trading. The tech-heavy Nasdaq jumped 3.6 percent and the S&P rose 2.3 percent, report AFP.

European equities all closed more than two percent higher following solid gains in Asia.

"It is largely a sentiment-driven trade wrapped up in the notion that stocks are deeply oversold and due for a bounce," analysts at Briefing.com said.

Stocks have tumbled for much of this week on fears the Federal Reserve was planning to lift US interest rates by 75 basis points at a single meeting.

However, equities on Friday staged "a relief rally" after Fed boss Jerome Powell calmed nerves over the potential hefty increase, said Jeffrey Halley, analyst at OANDA trading group.

"The rally today looks more like a technical rebound after a torrid week than a structural turn in sentiment," he added.

Investors also sold off stocks as they sought to reduce risk amid the Ukraine war and worried about the economic impact of China's Covid lockdowns.

Those China worries also eased on Friday. "Global sentiment seems to be getting some relief as China officials suggested that Covid-related lockdowns -- which have been another source of uneasiness -- may be set to ease," analysts at Charles Schwab investment bank said.