S&P 500 bounces back from previous losses, trying to pick up a 4-day losing streak

US stocks rose on Tuesday, reversing earlier declines, as investors looked to key inflation data and earnings reports later in the week that will provide the Federal Reserve with more updated information on the state of the US economy.

The S&P 500 rose 0.43%, rebounding after hitting its lowest level since November 2020 earlier in the session. The Nasdaq Composite also rebounded from a 52-week low to trade 0.18% higher. The Dow Jones Industrial Average rose 337 points, or 1.16%, boosted by jumps in Amgen And the Walgreens Boots Alliance.

Bond prices also fell, and the yield on US 10-year Treasuries approached the key 4% overnight. yields They retreated from their crowd on Tuesday morning, with the 10-year yield up about one basis point at 3.894%. Bond yields are inverse with prices, and the basis point is one hundredth of one percent.

These moves came as investors are looking forward to key inflation data that will inform how aggressively the Federal Reserve can raise interest rates to tame inflation. On Wednesday, the producer price report will be released followed by the September CPI on Thursday. On Friday, September retail sales will give insight into consumption.

The path of the central bank’s interest rate increases will determine whether the US economy has fallen into recession, or is facing a small downturn.

JPMorgan CEO Jamie Dimon warned Monday that the United States is likely to fall into a recession in the next “six to nine months,” and said the S&P 500 could drop another 20% depending on whether the Fed cares about a drop. weak or difficult. Economy.

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“This is an apocalyptic market environment grappling with a weak economy, uncertainty about earnings and how long the Fed tightening will last, and sentiment issues with the psychology of a very risk-averse investor,” said David Bahnsen, chief investment officer at The Bahnsen. group, in a note on Tuesday.

“We believe the Fed will raise rates one or two more times until the fed funds rate hits 4% and then pause, at which point the Fed will assess the damage that has been done,” he added.

This week also begins earnings season. on Friday, JP MorganAnd the Wells FargoAnd the Morgan Stanley And the City Four of the world’s largest banks announce quarterly earnings.

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