All three major U.S. stock indexes rallied to end the session 1.9% to 3.4% higher
Wall Street jumped to robust gains at close on Monday as solid earnings and a financial policy reversal in Britain fuelled risk appetite and boosted the sterling and euro against the greenback.
All three major U.S. stock indexes rallied to end the session 1.9% to 3.4% higher.
The catalysts that have triggered in the markets year-to-date are well-known, said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. Now, investors are looking for green shoots of catalysts that can start to provide some improvement.
Stocks were primed for a strong open after Britain’s new finance minister Jeremy Hunt scrapped Prime Minister Liz Truss’s proposed tax cuts and reined in her energy subsidies, while Bank of America Corp posted consensus-beating third quarter results, having benefited from a spate of interest rate hikes from the Federal Reserve.
The Dow Jones Industrial Average rose 550.99 points, or 1.86%, to 30,185.82, the S&P 500 gained 94.88 points, or 2.65%, to 3,677.95 and the Nasdaq Composite added 354.41 points, or 3.43%, to 10,675.80.
European stocks closed sharply higher on the UK’s financial policy reversal.
That reversal has ‘lifted some clouds, but it doesn’t lift the political risk, said Peter Cardillo, chief market economist at Spartan Capital Securities in New York, who added that the new government formed by British Prime Minister Liz Truss ‘has caused a lot of uncertainties.’
The pan-European STOXX 600 index rose 1.83% and MSCI’s gauge of stocks across the globe gained 2.09%.
Emerging market stocks rose 0.32%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.19% lower, while Japan’s Nikkei lost 1.16%.
Long-dated Treasury yields turned higher late in a choppy session for the bond market, even as investor sentiment eased in the wake of the British policy about-face.
Benchmark 10-year notes last fell 3/32 in price to yield 4.0166%, from 4.006% late on Friday.
The 30-year bond last fell 23/32 in price to yield 4.0214%, from 3.975% late on Friday.