S&P 500 and Nasdaq rise in volatile session

Investors have struggled in recent months to assess the extent and speed of the Fed’s boosting of interest rates in its quest to do so Inflation rate. Some money managers worry that tightening policy could slow economic growth or even push the US into recession. Supply chain disruptions exacerbated by the pandemic have been further damaged war in ukraine And China’s strategy to combat the Corona virus. This has increased the cost of energy, food, and other basic commodities.

Some investors said they believe recent data indicates that the US economy is declining and inflation is cooling, which means the Fed may not need to act more aggressively than originally planned. Vice Chairman of the Federal Reserve Lyle Brainard said Thursday Interest rate increases of half a percentage point would likely be appropriate at the next two Federal Reserve meetings, but they have not committed to a slower trajectory in subsequent meetings.

That helped fuel risk appetite on Thursday among investors, with all but two of the eleven S&P 500 sectors advancing. Ovin Devitt, chief investment officer at Moneta, said consumer strength and lower stock valuations are helping lift the outlook for stocks, which have generally slumped in 2022.

“The word on the street is that this is a good entry point – shares have sold so much that it has been exaggerated,” Ms Devitt said. Her company added to its position in assets that act as a hedge against rising inflation.

Crude oil prices rose after the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producers, led by Russia, agreed at a more-than-expected meeting on Thursday. Increasing oil production. The United States and Europe have pressured the cartel, dubbed OPEC+, to pump more crude, as Russia’s invasion of Ukraine sent oil prices soaring.

Brent crude futures, the global oil standard, recently rose about 1% to $117.48.

“The fear is that demand is still outstripping supply, and that increased supply is not making up the difference,” said Peter E. Klinglehofer, managing director of investment management at investment advisory firm Hamilton Capital in Columbus, Ohio. His company is overweight on energy stocks.

In the bond markets, the return on the index US 10-year Treasuries It traded at 2.913% Thursday from 2.930% Wednesday. Yields and prices move inversely.

Stocks have fallen this year, and investors are looking for signs that the latest crisis is over. Joseph Zappia, president and chief investment officer at LVW Advisers, said he’s watching for signs of seller exhaustion, including surges in strong volumes and companies reporting bad news that isn’t pushing the market lower.

“The markets have gone up too quickly as a result of all the stimulus, the liquidity and Covid-19. Prices have gone up much faster than profits for the better part of that, and now a lot of that money has to be coming out of the system,” Zappia said. His company has shifted to defensive sectors. , away from discretionary shares.

Investors are watching Labor market data. Federal Reserve Chairman Jerome Powell has Expressed concern in recent months The job market is overheated. Can the narrow job market In addition to inflation As competition for workers enhances the bargaining power of wages.

The ADP employment report showed that the private sector added 128,000 jobs in May, lower than the 299,000 economists polled by the Wall Street Journal had expected. Unemployment Complaint Rates It dropped to 200,000 last week The Labor Department said Thursday from the previous week’s revised level of 211,000. The number is seen as a proxy for layoffs.

“It is a very challenging environment. There are many factors at play here, and it is very difficult to explain the dynamics Peter GarneryHead of Equity Strategy at Saxo Bank. “We think the Fed has to be very aggressive to control inflation.”

Microsoft Shares recovered from early losses, up 0.3%. the program The company reduced sales and profit guidance For the current quarter, citing the impact of foreign exchange rates as a stronger US dollar takes its toll. Analysts said the news is the latest example of companies facing margin pressures from the dollar this year.

In other individual stocks, shares

rubbery

It rose 23% after the online pet products retailer posted a surprise profit and forecast a revenue range that was mostly above Wall Street estimates.

MongoDB

Shares rose 18% after the database company’s results beat Wall Street estimates.

Offshore, the Stoxx Europe 600 continental index rose 0.6%, cutting a two-day losing streak. UK markets were closed for a holiday.

Major indices in Asia closed lower, with South Korea’s Kospi and Hong Kong’s Hang Seng down 1% each. Japan’s Nikkei 225 was down 0.2%, while China’s Shanghai Composite bucked the trend, adding 0.4%.

Write to Caitlin Ostroff at [email protected] and Hardika Singh at [email protected]