May 18, 2022

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"Wall Street" .. Strong gains after raising interest rates

“Wall Street” .. Strong gains after raising interest rates

US key stock indices rose on Wednesday after signs of progress in peace talks between Ukraine and Russia and the Federal Reserve’s decision to raise interest rates.

The Dow rose 518.76 points, or 1.55%, to its first three-day winning streak in more than a month. The Standard & Poor’s 500 Index was up 2.24% and the Nasdaq was up 3.77%.

Technology stocks, which have been broadly struggling since late last year, outperformed Wednesday. Shares of Facebook’s parent meta platform rose 6%, while Netflix added 4%.

Peace talks between Russia and Ukraine, Chinese stimulus and rising US interest rates boosted stocks and US Treasury yields on Wednesday.

There have been positive moves in stocks since the Federal Reserve raised its benchmark interest rate for the first time since 2018, and this year pointed to six more gains, which triggered a rally in stocks.

The central bank has significantly raised its forecasts for interest rate hike and inflation by 2022, but this change seems to be evidence that investors are taking the central bank rate hike seriously.

Treasury yield

U.S. 10-year Treasury yields have risen to 2.204% on expectations of a Fed rate hike, their highest since June 2019. The five-year yield has risen to 2.149%, the highest since May 2019.

Germany’s 10-year government bond yields have risen 0.403% since November 2018.

Data, retail sales in the United States rose 0.3% in February on Wednesday; Rising petrol and food prices have forced families to cut costs for other goods, which could restrict economic growth this quarter.

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European stocks

European stocks ended higher on Wednesday amid renewed optimism about the progress of negotiations between Russia and Ukraine, and global markets are waiting for the US Federal Reserve’s latest monetary policy numbers and economic outlook.

The Pan-European Stoxx 600 ended the day with about 3%, with major stock markets and almost all sectors in positive territory. Technology stocks rose more than 6.5% to make a profit, while utilities rallied and fell 0.8%.

Japanese stocks

Among Japanese stocks, the Nikkei was up 1.64% and the Topics index was up 1.46%.

The US dollar fell 0.29% against other currencies; It traded at 98.647 and stood at 118.32 against the yen, despite a five-year high in the previous session.

Spot gold rose 0.16% to $ 1,920.38 an ounce.

(Reuters)