Highlights
Stocks recovered Friday to end at the day's highs with support from a reversal in another bond market selloff. There were gains nearly across the board and megacaps leading the bounce. The Dow Jones industrial average rose 1.6 percent, the S&P 500 gained 1.8 percent, and the Nasdaq was up 2.1 percent. Bond yields rose but ended well down from the day's highs. Oil prices rose while the dollar dropped across the board.
Risk appetite recovered as yields fell back after a White House statement that the president would like to make a deal with China on trade and comments by Boston Federal Reserve President Susan Collins in the Financial Times that the Fed would absolutely be prepared to act to stabilize financial markets if needed. A steep selloff in bond prices and rising yields this week spooked many market participants as it occurred even as equities and risk assets plunged, which suggested that global investors were shunning US assets. Many investors have been wondering whether the situation had worsened so much that it was already time for central banks intervene to restore order, just as the Fed did during the financial market meltdown at the start of the pandemic.
As yields fell back, equities rebounded, paced by megacaps, and the buying spread across the market in the afternoon. Upbeat earnings from banks contributed to better sentiment. Best sectors included consumer staples, consumer discretionary, industrials, financials, health care, materials, information technology, communications services and real estate.
Risk appetite recovered as yields fell back after a White House statement that the president would like to make a deal with China on trade and comments by Boston Federal Reserve President Susan Collins in the Financial Times that the Fed would absolutely be prepared to act to stabilize financial markets if needed. A steep selloff in bond prices and rising yields this week spooked many market participants as it occurred even as equities and risk assets plunged, which suggested that global investors were shunning US assets. Many investors have been wondering whether the situation had worsened so much that it was already time for central banks intervene to restore order, just as the Fed did during the financial market meltdown at the start of the pandemic.
As yields fell back, equities rebounded, paced by megacaps, and the buying spread across the market in the afternoon. Upbeat earnings from banks contributed to better sentiment. Best sectors included consumer staples, consumer discretionary, industrials, financials, health care, materials, information technology, communications services and real estate.
Definition
Market Reflections track market reaction to the trading day's major events. Economic data, policymaker speeches, and company news are featured in this report as well as key indexes and financial instruments.
Description
Understanding why markets respond as they do is fundamental for an investor. Market Reflections help explain how the day's events, news, and data impact the outlook for the economy and for market prices.
