The Dow Jones Industrial Average jumped on Monday, recouping some sharp losses from the previous week, as traders looked forward to the highly anticipated Federal Reserve meeting and fresh inflation data.
The Dow Super index added 528.58 points, or 1.58%, to 34005.04. This was its first close above 34,000 since Dec. 2. The S&P 500 rose 1.43%, closing at 3,990.56, and the Nasdaq Composite rose 1.26%, to 11,143.74.
A rally in Boeing shares pushed the Dow Jones index higher after reports that the airline is close to a deal with Air India. in another place, Energy stocks rose As oil prices stabilize, after several weeks of decline.
Wall Street comes off a tumultuous week that saw it all Three major averages are losing ground. The Dow and S&P 500 suffered their worst weekly losses since September, falling 2.77% and 3.4%, respectively. The Nasdaq fell about 4%.
“Today’s action is mostly a reversal bounce after last week’s poor performance,” said Yung-Yu Ma, chief investment analyst at BMO Wealth Management. “There will probably be some cautious optimism ahead of tomorrow’s CPI report, but there are also some underlying concerns. We can see that anxiety today in a bull market for stocks that has already sent the VIX up quite sharply.”
“Europe, which outperformed last week, has slipped today, while the United States is bouncing back,” he added. “It talks about a volatile market with low conviction; strong markets have better consolidation.”
A slew of deal-making activity boosted morale. Coupa Software and Horizon Therapeutics were among the biggest movers on Monday after the two companies announced they had agreed to buy. Coupa shares gained 26%, while Horizon added 15%.
Meanwhile, a New York Federal Reserve survey showed that consumers have He became more optimistic about inflation In November. The bank’s survey of consumer expectations showed that consumers expect the one-year inflation rate to be 5.2%, down 0.7 percentage points from October.
On Tuesday, the Consumer Price Index for November will be released and traders will be looking for a sign of slowing inflation. On the same day, the Federal Reserve will begin its two-day meeting and is expected to announce another rate hike on Wednesday, although traders expect a smaller move than in recent months.
In addition to an expected rate hike, the Fed’s updated economic outlook and Chairman Jerome Powell’s press conference could be key signals of what the central bank wants to do in the coming months.
“Financial conditions have softened significantly since the October CPI reading last month, so the Fed will likely use the December FOMC meeting to undo that.“,” said Clive Hodge, chief investment officer at Cornerstone Wealth. “We think the markets are very bullish on rates after the first quarter and we expect Powell to take a more hawkish tone and point to higher rates for a longer period of time than what is currently being priced in by the futures markets.”
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