The S&P 500, Dow, and Nasdaq all opened higher on Friday following an upbeat report from FED officials.
Wall Street opened higher in Friday’s session after rising hopes of smaller interest hikes. The Wall Street main index opened higher and covered some of this week’s losses. The S&P 500 index rose by 1.81%, and the Dow Jones average industrial was up by 2.16%, posting one of its highest-earning days in October.
Following the release of Tesla Inc’s financial report, the Nasdaq jumped for the second day, and today it went up by 1.79%. The bond market, on the other hand, declined after rising hopes of smaller interest hikes in the next meeting. The U.S. 10-year treasury yield sank by 0.12%, yet remains higher by 4.221. The rise in the Wall Street index and the decline in the bond market came after the release of talk that the Federal Reserve policymakers might discuss the possibility of taming inflation but with less aggressive interest hikes.
On the last three interest hikes, the FED lifted its bank interest by three quarters, for the first time over the past 20 years.
The approach is believed to help tame inflation or at least bring it down by 2%. Yet, all hopes went down after the releasing CPI and PPI report. Inflation is still way too high and that might be the main reason why some FED officials are starting to think of an alternative solution or easing monetary policy.
The three indexes are in the bear market territory and require a correction. Rising interest rates at a faster and higher pace won’t provide any help either. Nasdaq social media name stocks still suffer from share decline issues. Yet, Netflix, Microsoft, and Tesla are balancing between the wins and the losses at some acceptable level.
The stock market was under the pressure of more aggressive interest hikes, which played a critical role in its recent crashes. Still, the U.S dollar is gathering momentum and attracting currency traders. However, some experts believe that in light of the market’s macroeconomics, up and down, it’s only a matter of time to see a dollar crash in the market.
According to Richard Miles, the market is rushing and the dollar has been on a tear, so what does that mean?
The US dollar was able to perform well only because the European currency declined due to higher inflation and the energy crisis. They claim that higher interest rates have put upward pressure on the US dollar, making it more appealing to foreign investors.
However, there are concerns that if the FED fails to control inflation, the dollar’s market value will plummet, similar to what happened to the British pound. For the time being, European countries rely more on US exports than on European imports, but this could change. Recent European official speakers’ meetings suggest that some countries have reconsidered importing from the U.S due to the high prices.
If demand declines, this might weaken the dollar’s value in the international market.