US stocks took off as investors wait for the start of the fourth quarter, when markets open Monday morning.
Wall Street ended a miserable September on Friday with the S&P 500’s worst monthly slip since the coronavirus pandemic sent global markets crashing. It is now at its lowest level since November 2020 and is down more than a quarter since the start of the year.
The Fed has been at the forefront of the global campaign to slow economic growth and hurt job markets just enough to undermine inflation, but not so much as to trigger a recession.
On Friday, the Fed’s preferred measure of inflation showed it was worse than economists had expected last month. That should keep the Fed on track to keep rate hikes high for a while, increasing the risk of it going too far and causing a downturn.
Vice Chairman Lael Brainard was the last Fed official on Friday to insist that interest rates not be pulled early.
The S&P 500 fell 1.5% and closed at 3,585.62 Friday. The Dow Jones Industrial Average fell 1.7% to 28,725.51. The Nasdaq composite fell 1.5% to 10,575.62. The tech-heavy index fell 10.5% in September and is down 32.4% so far this year. Shares of smaller companies also had a difficult September. The Russell 2000 ended the month at 9.7%.
On Friday, it lost 0.6% to 1,664.72. Other concerns hang over global markets, including the Russian invasion of Ukraine. A UK government plan to cut taxes has recently sent bond markets tumbling for fear it would make inflation worse.
Bond markets only calmed down after the Bank of England pledged to buy last week, but it takes a lot of UK government bonds to cut interest rates again. The stunning and rapid rise of the US dollar against other currencies, meanwhile, raises the risk of so much stress that something will burst somewhere in the global markets.
Meanwhile, Asian stocks were largely lower on Monday. Tokyo rose while other regional markets fell. Shanghai was closed for the week-long Chinese National Day.
Japan’s Nikkei 225 index gained 1.1% to 26,215.79 after a quarterly survey by the Bank of Japan found that sentiment among manufacturers has deteriorated on the back of rising costs, the weakening yen and ongoing pandemic-related restrictions.
The main metric for the ‘tankan’, which measures sentiment among major manufacturers, was plus 8, down from plus 9 in the previous quarter. The tankan measures company sentiment by subtracting the number of companies that say business conditions are negative from the number of companies that respond positively.
“Today’s Tankan research suggests that while the services sector is benefiting from the easing virus wave, the outlook for the manufacturing sector continues to deteriorate,” according to a report from Capital Economics. largest economy.
The BOJ has kept interest rates below zero in a protracted effort to encourage inflation and keep deflation at bay as the country ages and its population shrinks. That has kept the value of the yen weak against the US dollar, which has strengthened as the Federal Reserve raises interest rates to combat decades-long inflation.
The dollar traded at 145.04 yen early Monday, down from 144.68 yen late Friday. The euro stood at 97.98 cents, against 97.96 cents.
Elsewhere in Asia, Hong Kong’s Hang Seng Index fell 0.9% to 17,073.81. The Australian S&P/ASX 200 fell 0.3% to 6,456.90. Taiwan’s Taiex lost 0.9% and Bangkok’s SET fell 1.3%.
#STOCK #NEWS #Dow #Nasdaq #rise #kicks #oil #surges #OPEC #speculation