Wall Street Rally Gathers Steam

Barry Adams
04 Oct, 2022
New York City

Stocks extended rally for the second day in a row as fears recede on Wall Street. 

Market mood improved on the hopes that the Federal Reserve may slow future rate hikes and may even pause as the U.S. rate hikes are stoking worldwide commodities inflation and currency market chaos. 

The British pound, the Japanese yen and the euro have dropped at least 20% in the last six months, since the Federal Reserve began its aggressive rate hike in March.  

Tensions also receded after Credit Suisse executives reassured investors over the weekend that the investment bank has sufficient liquidity. 

Market sentiment also improved after the number of job openings declined to 10.1 million in August from a downwardly revised 11.2 million in July, the U.S. Census Bureau reported Tuesday. 

The job openings are still near the record 11.9 million in March, but the slight easing of the data also contributed to positive sentiment. 

The S&P 500 index jumped 2.8% to 3,781.24 and the Nasdaq Composite index surged 3.3% to 11,600.59. 

The VIX index, a measure of market volatility, declined 5% after investors focused on searching bargains among the recently beaten down stocks. 

Crude oil increased $2.94 to $86.41 a barrel and natural gas increased 23 cents to $6.71 a thermal unit. 

The yield on 2-year notes decreased to 4.05%, 10-year notes fell to 3.58% and 30-year bonds eased to 3.67%. 

 

European Markets Extend 2-day Rally 

In Europe, market indexes accelerated gains following the sharp gains in New York. 

In addition, the natural gas prices eased in Europe trading and dropped to a ten-week low. 

Brent crude oil price in London rose 3.2% to $91.62 a barrel and TTF natural gas prices declined 6.4% to 159 euros a megawatt hour. 

The DAX index increased 3.5% to 12,630.29, the CAC-40 index soared 3.9% to 6,022.79 and the FTSE 100 index gained 2.5% to 7,080.90. 

the euro rebounded and moved further away from a 20-year low to 99 U.S. cents and the British pound jumped to $1.14. 

The Italian 10-year bonds yields also improved to 4.2% from the 10-year high of 4.5% in the end of September.  

 

Asian Markets Surge, N Korea Fires Missile 

Stocks in Asia gained on the improved global market sentiment and a decline in the U.S. dollar. 

Stocks jumped in Tokyo despite North Korea firing a missile over Northern Japan before landing in the Pacific ocean.  

North Korea fired the missile before warning Japan's military as the communist nation stepped up its weapons testing program. 

Smaller-than-expected rate increase of 25 basis points by the Reserve Bank of Australia also contributed to market sentiment.   

The Nikkei 225 index jumped 2.96% to 22,962.21, the Hang Seng index fell 0.8% to 17,079.51 and the Sensex index increased 2.2% to 58,065.47. 

Defense sector stocks in Tokyo rose after North Korea fired a missile for the first time in five years. 

The Reserve Bank of Australia hiked its key lending rate by 25 basis points and 10-year government bond yield dropped to a two-week low of 3.7%. 

The RBA revised its key lending rate to 2.60% from 2.35% and added that additional rates are required to bring down inflation back to its target range between 2% and 3%.