Home / Markets / Stock Markets /  Wall St opens higher a day after Dow entered bear market

Wall Street's main indexes climbed early Tuesday, after five sessions of relentless selling on worries of a rate-hike induced economic slowdown. Both the Dow and S&P 500 finished at their lowest level of 2022 on Monday following another losing session.

About 15 minutes into trading, the Dow Jones Industrial Average was up 1.3% at 29,631.20, and the S&P 500 was up 1.6% to 3,711.57. Gains for technology companies helped push the Nasdaq composite up 2% to 11,022.03.

Benchmark 10-year Treasury yields ticked up from Monday's 12-year high and the dollar eased from 20-year highs on a basket of currencies.

"U.S. rate expectations have increased fairly significantly," said Andrew Hardy, investment manager at Momentum Global Investment Management, but he added that "there's a huge amount of bearishness already priced into markets."

The gains came as US durable goods orders fell 0.2% to $272.7 billion last month in a report that was far better than analysts had expected.

But market watchers attributed the early gains to the beaten-down state of US equities over the last month following hawkish commentary by the Federal Reserve that has been followed by aggressive interest rate hikes by the US central bank and overseas peers.

Markets see 74% probability of a further 75 bps move

Markets are seeing a 74% probability of a further 75 basis points move at the next US Federal Reserve meeting in November.

The Fed will need to raise interest rates by at least another percentage point this year, Chicago Fed President Charles Evans said today, a more aggressive stance than he has previously embraced that underscores the central bank's hardening resolve to quash too-high inflation.

Other central bank speakers due on Tuesday include Fed Chair Jerome Powell and European Central Bank President Christine Lagarde.

"Central bankers have been walking a tightrope trying to curb inflation while attempting to limit recessionary risks," Bank of America strategists wrote in a note released Tuesday. "However, their recent tone and 'jumbo' rate hikes have reinforced that the foremost priority is controlling inflation, even at the potential cost of a recession."

With just a few days left in September, stocks are heading for another losing month as markets fear that the higher interest rates being used to fight inflation could knock the economy into a recession.

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