US Market Wrap
- Stocks rose at the end of a hectic week in financial markets, aided by Federal Reserve Chair Jerome Powell's guarantee that larger rate hikes are off the table for the time being, despite recent high inflation readings.
- Powell's statements soothed frazzled nerves and sparked a comeback in beaten-down risk assets in a market plagued by fears that more aggressive monetary tightening may tip the economy into a recession. Despite solid gains on Friday, many traders are sceptical that equities have struck a bottom following a selloff that saw US stock valuations plummet by $10 trillion in 18 weeks. Instead, they warn that investors should expect volatility since the Fed's capacity to combat price pressures without producing a hard landing may be hampered by circumstances beyond its control.
- The S&P 500 enjoyed a broad-based comeback on Friday after falling nearly 20% from its high and flirting with a bear market. It still fell for the sixth week in a row, the longest losing streak since June 2011. The Nasdaq 100 outperformed due to a rally in tech titans such as Apple, Microsoft, and Amazon. Meanwhile, Elon Musk created havoc with his takeover attempt for Twitter Inc., stating his bid was "temporarily on hold" before reiterating that he's "still committed" to the acquisition, throwing the social media behemoth into a tailspin. Tesla has risen, and Treasury bonds dropped along with the dollar.
- Some prominent voices on Wall Street questioned the prospects for equities after a dramatic selloff during another rocky week for global markets. Goldman Sachs Group Peter Oppenheimer said on Tuesday that the sell-off has generated buying opportunities, with headwinds like inflation and hawkish central banks already factored in.