Stocks climb to send Wall Street to first gain in 3 days
NEW YORK — Stocks rose Thursday for their first gain in three days, even as bond yields climbed to tighten the squeeze on Wall Street.
The S&P 500 rose 29.96 points, or 0.8%, to 3,981.35 after erasing a morning loss. The Dow Jones Industrial Average added 341.73, or 1%, to 33,003.57, while the Nasdaq composite gained 83.50, or 0.7%, to 11,462.98.
Stocks flipped from losses to gains after a Federal Reserve official made comments that raised hopes the central bank may not ramp up its fight against inflation as aggressively as feared. That countered recent talk from other officials who raised worries about much bigger increases to interest rates following several hotter-thanexpected reports on the economy.
Raphael Bostic, president of the Federal Reserve Bank of Atlanta, told reporters that for now he still supports lifting the Fed’s key overnight rate to a range of 5% to 5.25%, up from its current 4.50% to 4.75%. That’s lower than a good chunk of investors on Wall Street are forecasting.
“That’s what gave the market a little hope, that there is a voice not saying to raise the terminal rate,” or where the Fed will ultimately stop hiking rates, said Brent Schutte, chief investment officer at Northwestern Mutual Wealth, “because a lot of the other people who talk seem like they’re constantly saying: ‘Elevator Up.’”
Higher rates can drive down inflation because they slow the economy, but they also raise the risk of a recession down the line. They likewise hurt prices for stocks and other investments.
“This is where we’re at now,” Mr. Schutte said. “We’re making policy based upon — and the market is moving off — every month’s data rather than people paying attention to the trend. And these things get revised. That’s why it’s so volatile.”