US stocks jump 2% after recent selloff;  yen drop vs dollar

US stocks jump 2% after recent selloff; yen drop vs dollar

  • S&P 500 ends up more than 2%
  • US Treasury yields rise
  • Yen plunges against dollar
  • Crude oil settles higher

NEW YORK, June 21 (Reuters) – Stocks on global indexes rose sharply on Tuesday, with major US stock indexes each ending up more than 2% following a recent selloff, while the Japanese yen fell against the US dollar at its lowest level since October 1998.

Wall Street climbed as participants returned from a long weekend, with investors buying up shares of megacap growth and energy companies hit last week by global economic worries. read more

Energy shares climbed along with oil prices. Oil gained on high summer fuel demand. read more

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“After back-to-back weeks of 5% declines, you’ve pushed the ball under the water far enough now that we’re getting a bounce,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.

But, Nolte said, “interest rates are still going higher. Oil is still going higher.”

Expectations of interest rate hikes from major central banks and worries about a global recession have kept investors on edge. Central banks are expected to tighten policy to combat high inflation.

The Dow Jones Industrial Average (.DJI) rose 641.47 points, or 2.15%, to 30,530.25, the S&P 500 (.SPX) gained 89.95 points, or 2.45%, to 3,764.79 and the Nasdaq Composite (.IXIC) added 270.95 points, or 2.51%, to 11,069.30.

The pan-European STOXX 600 index (.STOXX) rose 0.35% and MSCI’s gauge of stocks across the globe (.MIWD00000PUS) gained 1.83%.

US Treasury yields were higher than the risk-off mode that weighed on US markets last week took a breather.

Benchmark 10-year yields were at 3.305%, up from their 3.239% close at the end of last week.

All eyes are now on Fed Chair Jerome Powell’s testimony to the Senate Banking Committee on Wednesday for clues on rates.

Goldman Sachs has said it now thinks there is a 30% chance of the US economy tipping into a recession over the next year, up from its previous forecast of 15%. read more

In the foreign exchange market, the Japanese yen plunged against the US dollar to 136,330 per dollar. read more

Japanese Prime Minister Fumio Kishida said the central bank should maintain its current ultra-loose monetary policy. This makes it an outlier among other major central banks. read more

Brent crude futures rose 52 cents, or 0.5%, to settle at $114.65 a barrel. The US West Texas Intermediate (WTI) crude contract for July expired on Tuesday, closing at $110.65, with a gain of $1.09, or 1%. The most active August contract was up $1.53 at $109.52.

Spot gold dropped 0.3% to $1,832.27 an ounce.

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Additional reporting by Elizabeth Howcroft in London; also by Devik Jain and Anisha Sircar; Editing by Louise Heavens, Chizu Nomiyama, Will Dunham and Mark Heinrich

Our Standards: The Thomson Reuters Trust Principles.

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