Wall Street rises, ASX poised for gains

It is the second day in a row of modest moves for the market, but some severe swings up and down continue over the past few weeks.


Stocks rallied over the summer on hopes that inflation was nearing its peak and that the Federal Reserve may raise interest rates less aggressively than previously feared. But recent comments from Fed officials have dampened those expectations, sending Wall Street on Monday to its worst day in months. Meanwhile, dismal reports on the economy have highlighted the risk of a recession.

Wall Street’s focus remains on Friday, when Fed Chairman Jerome Powell addresses an annual economic conference in Jackson Hole, Wyoming.

It has been the scene of market-moving speeches in the past, leaving investors hoping Powell will provide clarity on further rate hikes. Will it be aggressive, which is what traders call a bias towards aggressive rate increases? Or dovish, which is Wall Street parlance for easier terms?

Brian Jacobsen, senior investment strategist at Allspring Global Investments, doesn’t expect Powell to be clearly one or the other.

“I don’t think he wants to sound aggressive or dovish, maybe he wants to sound cowardly,” Jacobsen said, citing the many variables that could change the Fed’s thinking ahead of its next rate policy meeting in September.

Jacobsen warned that the speech may be a “bare burger” with little to chew on, although the market could take that as a positive given some expectations that Powell will sound aggressive.

Higher interest rates slow down the economy in the hope of undermining inflation. But they also risk suffocating the economy if done too aggressively, driving down the prices of all kinds of investments.

Treasury yields have been rising recently, in part in anticipation that the Federal Reserve will continue to lean toward aggressive rate hikes to quell the worst inflation in decades. The two-year yield, which tends to track Fed expectations, rose to 3.40 percent from 3.30 percent on Tuesday.


The 10-year yield, which helps set rates on mortgages and many types of loans, rose to 3.11 percent from 3.05 percent after a report showed US orders for long-lived goods they remained stable in July. However, excluding transportation, growth was stronger than economists expected.

In the stock market, Intuit rallied 3.6 percent for one of the biggest gains in the S&P 500. The owner of TurboTax delivered better results for the latest quarter than expected and forecast revenue for the next fiscal year that exceeded expectations of some analysts.

On the losing end were several retailers, who are among the last companies to report how much profit they made in the spring.

with AP

Be the first to comment

Leave a Reply

Your email address will not be published.