Stocks Rebound as Jittery Investors Adjust to Rising Rates and Stronger Dollar

Barry Adams
28 Sep, 2022
New York City

Stocks rebounded in early trading and Treasury yields inched lower on the expectations that the Federal Reserve may pause. 

The U.S. dollar continued its advance against all major currencies and the euro dropped to a new record 2-decade low and the British pound fell to a new 4-decade low. 

Energy and tech stocks led the gainers after crude oil rebounded from 9-month low and bond yields edged lower. 

The S&P 500 index increased 0.95% to 3,682.90 and the Nasdaq Composite index rose 0.8% to 10,941.35. 

Amazon, Tesla, Microsoft and Alibaba.com jumped between 1% and 1.2%. 

Apple Inc declined 3.3% after Bloomberg News reported that the company canceled plans to increase production of iPhone after demand fell short of expectations. 

Crude oil increased $2.20 or 2.8% to $80.73 a barrel and natural gas fell 7 cents to $6.56 a thermal unit. 

The yield on 2-year Treasury notes declined to 4.15%, 10-year Treasury notes fell to 3.78% and 30-year bonds edged down to 3.69%. 

European markets rebounded from early losses and turned higher following the U.S. averages. 

The Bank of England was forced to intervene and conduct a temporary bond purchase program and shore up the weakening pound. 

The central bank's intervention arrested the decline in the pound and stabilized the bond yield for now but traders are anticipating the currency to resume its slide. 

The DAX index inched up 0.3% to 12,177.24, the CAC-40 index gained 0.2% to 5,763.22 and the FTSE 100 index advanced 0.3% 7,005.39.   

The euro inched lower to 95.56 U.S. cents and the British pound fell to $1.07. 

 The yields on 10-year U.K. bonds held at 4.04%, the German bunds at 2.16%, French bonds at 2.72% and the Italian bonds 4.68%. 

The spread between the Italian and German bonds continued to widen after the latest election results on Monday.