Wall Street rebounds thanks to low yields and with an eye on the Fed

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U.S. stock indices rose on Wednesday after a recent slide, in line with lower bond yields, as investors await more clarity on the Federal Reserve’s plans to tighten monetary policy. .

* The tech-heavy Nasdaq led gains among major indices and snapped a seven-session losing streak. Shares of Amazon.com Inc (NASDAQ: AMZN ), Tesla (NASDAQ: TSLA ) Inc and Microsoft Corp (NASDAQ: MSFT ) rose.

* US stocks have fallen sharply since mid-August after aggressive comments from Fed Chairman Jerome Powell, coupled with signs of economic slowdown in Europe and China, as well as moves by major central banks to rein in inflation .

* Data showing strength in the US economy has prompted traders to bet on a 75 basis point interest rate hike by the Fed later this month.

* Federal Reserve funds futures imply that investors are pricing in more than a 76% chance of a 75 basis point hike.

* Yields on 10-year Treasuries fell from three-month highs earlier in the session, buoying shares of rate-sensitive stocks including Tesla Inc and Microsoft Corp.

* Still, investors are still looking for more external signs of how the Fed’s rate hikes will play out to curb rising inflation.

* “Bond markets are doing a little better today, which is giving the stock a better feel, but the big concerns remain what the Fed is going to do on September 21. So we’re looking at a tug-of-war. loosens daily,” said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management Company.

* Focus is on Powell’s speech on Thursday and next week’s US consumer price data for clues on the path of monetary policy.

* Based on preliminary closing data, the gained 71.90 points, or 1.84%, to 3,980.09, while the Nasdaq rose 246.67 points, or 2.14%, to 11,791, 58. ndustrial Average rose 439.05 points, or 1.41%, to 31,583.69.

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