The S&P 500 rose 2.45% on its best day in three weeks, closing at 3,764.84 points and recovering from a 5.8% drop after falling last week. The Nasdaq Composite gained 2.5% to close at 11,069.30 points and the Dow added more than 643 points, or 2.2%, to close at 30,531.77 and recorded its best one-day gain since May 4. Bitcoin (BTC-USD) rose again above $ 21,000 after a cryptocurrency breakout that sent prices briefly below $ 18,000 for the first time since December 2020 at the weekend. Bond yields rose, with the 10-year benchmark yield rising to almost 3.3%, and US crude oil prices rose 1.5% to $ 111 a barrel. Tuesday’s early recovery rally in high-risk assets came as at least a brief break amid weeks of intense sales. The S&P 500 sank into its first bear market since the pandemic peaked last week and sell-offs rose even further as the Federal Reserve launched a larger-than-usual 75-point increase in interest rates and indicated it would be willing to go further. tightening and at the expense of some economic growth to reduce uncontrollable inflationary pressures. Federal Reserve Chairman Jerome Powell is due to deliver his semi-annual address to Congress on Wednesday and Thursday, during which he is likely to be pressured by lawmakers about the Fed’s steps to reduce inflation and the extent to which they can burden the economy. . And already, concerns about the resilience of the economy have risen sharply. Some economists at large Wall Street companies have downgraded their growth forecasts in recent days, reflecting the increased risk of recession. The recession is usually defined as two consecutive quarters of negative GDP growth, although the final call is made by the National Bureau of Economic Research (NBER). “The most likely outlook is very weak growth and persistently high inflation,” Bank of America economists wrote in a note Friday. “We see a 40% chance of a recession next year. Our worst fears about the Fed have been confirmed: they have fallen far behind the curve and are now playing a dangerous cover game.” The story goes on Others were even more declining. The main case of Deutsche Bank requires a recession to start in the third quarter of 2023, after the sluggish growth of real GDP of only 1.2% in the US in 2022, compared to the 1.8% previously observed. Goldman Sachs economists “now see the risk of recession as higher and more predictable,” chief economist Jan Hatzius said in a new note. Increase the chance of recession to 30% from 15%. Rising risks of a formal downturn in the US economy also leave the S&P 500 vulnerable to a more downward trend, even after slipping more than 22% so far for the year to date. The fall in the S&P 500 market since World War II averaged 29.6% with an average duration of 11.4 months, according to data from Ryan Detrick of LPL Financial. However, when bear markets coincide with the recession, the S&P 500 tends to fall 34.8% on average to the lowest level of the market and lasts for almost 15 months. NEW YORK, NY – JUNE 16: Traders work on the floor of the New York Stock Exchange (NYSE) on June 16, 2022 in New York City. Shares fell sharply in morning trading as investors reacted to the Federal Reserve raising interest rates since 1994. (Photo by Spencer Platt / Getty Images)
On the go
Kellogg (K) shares rose after the company announced plans to split into three separate companies. The start-ups will consist of a distinct global snack food company, a North American cereal company and a pure plant-based food company. Tesla Shares (TSLA) won when CEO Elon Musk said the company’s stake would be reduced by only about 3.5% in the short term, or a smaller percentage than previously expected. Musk confirmed that 10% of Tesla’s employees would be cut over the next three months, but that continued hiring would keep the net down to just 3-3.5% of the company’s total workforce, he told Bloomberg News on Tuesday. . Shares of Coinbase (COIN) jumped more than 12% as cryptocurrency prices recovered after reaching multi-year lows. The cryptocurrency trading platform has seen its stock slide nearly 80% from year to year close on Friday and the shares are trading well below the $ 250 reference price since Coinbase went live in April 2021.
– Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter. Read the latest financial and business news from Yahoo Finance Follow Yahoo Finance on Twitter, Instagram, YouTube, Facebook, Flipboard and LinkedIn
