US stocks bounce back from recent declines - RTHK
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US stocks bounce back from recent declines

2022-05-24 HKT 04:27
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  • The major indices on Wall Street all posted solid gains. File photo: Shutterstock
    The major indices on Wall Street all posted solid gains. File photo: Shutterstock
US equity markets ended higher on Monday as gains from banks and a rebound in megacap market leaders supported a broad-based rally following Wall Street's longest streak of weekly declines since the dotcom bust more than 20 years ago.

All three major US stock indexes posted solid gains with the biggest lift provided by rebounding tech and related growth stocks, notably Apple and Microsoft.

The S&P 500 gained 1.9 percent to end at 3,973, while the Nasdaq Composite gained 1.6 percent to 11,535. The Dow Jones Industrial Average rose 2.0 percent to 31,880.

Interest rate-sensitive banks shot higher after the largest US lender, JPMorgan Chase raised its current year interest income outlook.

"It feels like a relief rally more than a fundamental change in investor sentiments," said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York. "Investors as a whole feel like there's another shoe to drop and they're probably right in the short term."

On Friday, the S&P 500 closed 18.7 percent below its record closing high reached on January 3. If the benchmark index closes 20 percent or more below that record, it will confirm it has been in a bear market since then.

Markets have been roiled in recent weeks by worries about persistently high inflation and aggressive attempts by the Federal Reserve to rein it in while the global economy copes with fallout from Russia's conflict with Ukraine.

"Today it would appear the market is less fearful over the inflation factor and the Fed being able to orchestrate a soft landing so to speak," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.

"(But) the bias is still to the downside," Carlson added.

Market participants could get a hint of the Fed's state of mind when the minutes from its most recent policy meeting are released on Wednesday.

A spate of economic indicators this week might lend further support to the notion that inflation peaked in March, and also whether high prices have hurt consumer spending power.

A spate of dire warnings from retailers last week, including Walmart and Target raised such concerns. (Reuters)