A Wall Street sign is pictured on the New York Stock exchange (NYSE) in New York, March 9, 2020 (Credit: Reuters)
- The S&P 500 rose 39.25 points, or 1%, to 4,160.68, reversing a 1% decline in the morning.
- Stocks initially dropped on Wall Street as Target warned about reduced profit margins as it reduced prices to clear inventory.
- The economic weakness is on Wall Street’s mind this year, amid concerns about rising interest rates from the Federal Reserve.
U.S. equities rose on Tuesday as Treasury yields fell, but Wall Street remains shaky as investors await more clarity on the direction of interest rates, inflation, and the economy.
The S&P 500 rose 39.25 points, or 1%, to 4,160.68, reversing a 1% decline in the morning. The Dow Jones Industrial Average rose 264.36 points, or 0.8 percent, to 33,180.14 after jumping back and forth throughout the day. The Nasdaq composite rose 113.86 points, or 0.9%, to 12,175.23.
Gains in Apple, Microsoft, and other technology stocks are among the most powerful drivers driving the market higher. They benefited from a reduction in Treasury yields, with the 10-year yield returning below 3%. Lower rates in recent years have encouraged investors to pay higher prices for stocks, especially in fast -growing companies.
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Energy producer stocks also rose as oil prices rose to about $ 120 per barrel, up more than 55% year to date. Exxon Mobil was up 4.6 percent, while ConocoPhillips was up 4.5 percent.
Kohl’s stock rose 9.5 percent after the department store giant was reportedly in early talks to sell itself to Vitamin Shoppe owner Franchise Group for about $ 8 billion. JM Smucker rose 5.7 percent after reporting earnings that exceeded analysts ’expectations.
Stocks initially dropped on Wall Street as Target warned about reduced profit margins as it reduced prices to clear inventory. The retail behemoth fell 2.3 percent after announcing the changes needed to keep pace with changing customer patterns. Consumers across the country are spending more on restaurants and travel than on home improvement, as they did earlier in the year.
Other retailers were affected by the slowdown, with Walmart down 1.2 percent.
Concerns were further heightened when the World Bank drastically reduced its forecast for economic growth this year. It raised hopes of “stagflation,” a toxic mix of high inflation and sluggish growth not seen in more than four decades, by pointing to Russia’s fight against Ukraine and the prospect of severe food shortages.
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The economic weakness is on Wall Street’s mind this year, amid concerns about rising interest rates from the Federal Reserve. The central bank is struggling to fight the worst inflation in decades, but it risks choking the economy if it goes too far or too fast.
At its meeting next week, the Fed is more than expected to raise the main short -term interest rate to half a percentage point. This will be the second consecutive double-digit increase, which investors expect the third in July.