On Wall Street, stock indexes rose more than 1 percent yesterday, for the second day in a row, as investors hope that the Fed will not raise interest rates aggressively in the future, given that the US economy is technically in recession.
The Dow Jones rose 332 points, or 1.03 percent, to 32,529 points, while the S&P 500 jumped 1.21 percent, to 4,072 points, and the Nasdaq index rose 1.08 percent, to 12,162 points, reports the WSJ .
It was reported yesterday that US gross domestic product (GDP) slipped 0.9 percent on an annualized basis in the second quarter, for the second quarter in a row, while analysts had expected a slight increase.
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Some believe that it is not a recession
Although some believe that it is not a recession because not all economic segments have fallen, and the labor market is still strong, the fact is that GDP has fallen for two quarters in a row on a quarterly basis, which, by the usual definition, represents a recession.
Regardless of whether it is a recession or a slowdown in economic growth, this data has fueled speculation that the US central bank could be less aggressive in raising interest rates in the future.
To curb inflation, which is hovering at the highest levels in 40 years, the Fed on Wednesday raised key interest rates by a further 0.75 percentage points, for the second month in a row, to a range of 2.25 to 2.50 percent.
The Fed chief’s statement encouraged investors
Investors, however, were encouraged by Fed President Jerome Powell’s statement that further moves by the central bank will depend on future economic indicators and that a slowdown in monetary policy tightening is to be expected.
In any case, investors are calm as far as interest rates are concerned until the end of the summer because the next session of the Fed is not held until September. The market is also supported by the better-than-expected quarterly business results of most companies.
Last night, after the closing of Wall Street, better-than-expected results were announced by the tech giants Amazon.com and Apple, so the prices of these shares rose significantly. Thanks to this, the futures S&P 500 and the Nasdaq index are currently in the plus, so the growth of Wall Street could continue on Friday, for the third day in a row.
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Share prices also rose on most European stock exchanges yesterday. However, the London FTSE index weakened by 0.04 percent, to 7,345 points, but the Frankfurt DAX rose by 0.88 percent, to 13,282 points, and the Paris CAC by 1.30 percent, to 6,339 points.
