NEW YORK: Wall Street equities staged a stunning rebound on Monday (Oct 3) with gains over more than 2%, recouping some of the losses of the past weeks that led to the worst month for the market in 20 years.
The Dow Jones Industrial Average rose 765.38 points, or 2.66%, to 29,490.89; the S&P 500 gained 92.81 points, or 2.59%, at 3,678.43; and the Nasdaq Composite added 239.82 points, or 2.27%, at 10,815.44.
“The US yield markets (are) pulling back – that’s been a positive ... and that connotes a more risk-on environment,” said Art Hogan, chief market strategist at B. Riley Wealth in Boston.
Further supporting rate-sensitive growth stocks, the benchmark US 10-year Treasury yield fell after British Prime Minister Liz Truss was forced to reverse course on a tax cut for the highest rate.
All 11 major S&P 500 sectors advanced to positive territory, with energy being the biggest gainer.
Oil majors Exxon Mobil Corp and Chevron Corp rose more than 5%, tracking a jump in crude prices as sources said the Organization of the Petroleum Exporting Countries and its allies are considering their biggest output cut since the start of the Covid-19 pandemic.
Megacap growth and technology companies such as Apple Inc and Microsoft Corp rose over 3% respectively, while banks advanced 3%.
Tesla shares dropped 8.6% after the electric carmaker on Friday reported that while vehicle deliveries increased in the latest quarter, the total was at the low end of expectations.
A key manufacturing survey showing price pressures receding and demand slowing, helped buoy market sentiment, amid resurging hopes the Federal Reserve (Fed) might soon pull back on its aggressive interest rate increases.
Investors remain concerned about the Fed’s policy tightening as it battles to bring down the highest inflation in 40 years, even as a top central banker repeated the message that high costs are broad-based and will take time to bring down.
“It is too early to call for a Fed pivot, but it seems ... traders are growing confident that the global growth slowdown is starting to drag down pricing pressures,” Oanda analyst Edward Moya said.
The Institute for Supply Management said its manufacturing index dropped 1.9 points to 50.9, just barely above the 50.0 threshold indicating expansion and the weakest result since May 2020. But the prices index fell to the lowest since June 2020. – AFP, Reuters
