Awaiting Fed rate announcement, Wall Street closed higher

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, US, August 22, 2022. REUTERS/Brendan McDermid

Stocks closed higher on Wall Street. To regain more of their recent lossesas the countdown approaches zero for a long-awaited speech on interest rates.

The Standard & Poor’s 500 It rose 1.4% on Thursday. The Dow Jones He got 1% and Nasdaq It closed up 1.7%.

The stock ranged between earnings and the losses Since they suffered on Monday His worst day in months, where traders generally refrain from making large movements. Wall Street’s focus is on the economic summit in Jackson Hole, Wyoming, which has been the scene of market-defining Federal Reserve announcements in previous years. The Fed chair is scheduled to speak on Friday morning.

for this part, The revised reading of the general economy indicated that the contraction in the spring was not as severe as previously thought. The economy shrank 0.6% year-on-year, according to the government’s second preliminary reading, Softer than 0.9% in its initial estimate.

The 10-year treasury bond yieldwhich affects mortgage interest rates, fell to 3.03% from 3.11% on Wednesday.

This helped stocks tend to benefit more from lower interest rates.like companies Internet Based on technology. Companies whose profits are closely related to the strength of the economy, such as banks and commodity producers, also helped drive the market.

Telehealth providers are going strong after Amazon shut down its internal telemedicine service for employees. Teladoc gained 2.6%.

On the losing side, there have been many companies that have lowered their financial forecasts for the year. software company sales force Down 5.1%, the discount retailer dollar tree It fell 9.7%.

Several retail companies cut their forecasts recently, even after posting higher-than-expected earnings in the last quarter.. They struggle with rising inventories and rising costs, while customers, particularly those on lower incomes, are also affected by inflation.

However, Wall Street’s attention is still focused on Jackson Hole, Wyoming, Where economists from around the world meet for an annual symposium.

It has been the scene of many advertisements for Federal Reserve that defined the market in the past, and investors expect the head of the Federal Reserve, Jerome PowellTomorrow, provide some clarity on the direction of interest rates.

The Federal Reserve has raised interest rates four times this year as part of its efforts to rein in high inflation., with most of them being larger than the usual high, and investors wanting to know how the expected rise in the future tends. Powell will speak on Friday morning, and he can also talk about the Fed’s moves to start money printer that she used during the pandemic to boost the economy.

Stocks rose over the summer on hopes the Fed would be more flexible in raising interest rates. More than feared, investors saw signs that the country’s high inflation may be approaching its peak. The hope was that the Fed would scale back its rate increases sooner than expected and eventually not raise rates as much as they thought.

But recent statements from a number of Federal Reserve officials have made Back that story, Which gives hope for more clarity from Powell on Friday.

(with information from AP)

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