US Stocks Overcome Fed Interest Rate Jitters

(@FahadShabbir)

US stocks overcome Fed interest rate jitters

US stocks mostly pushed higher on Wednesday as interest rate hike fears faded, with the tech-heavy Nasdaq hitting a new-intra day record high

London, (UrduPoint / Pakistan Point News - 23rd Jun, 2021 ) :US stocks mostly pushed higher on Wednesday as interest rate hike fears faded, with the tech-heavy Nasdaq hitting a new-intra day record high.

However, eurozone stocks fell after report showed the economy booming, reinforcing interest rate hike fears there.

Meanwhile, oil prices rose further as reopening economies are set to drive demand higher, with some analysts saying hitting $80 a barrel for crude is increasingly possible.

Wall Street opened the day higher, adding to gains racked up on Tuesday after Fed chief Jerome Powell sought to ease concerns over the timing of higher interest rates in testimony before lawmakers.

"The markets appear to be finding relief from yesterday's dovish testimony on Capitol Hill by Fed Chairman Jerome Powell," said analysts at Charles Schwab brokerage.

Briefing.com analyst Patrick O'Hare noted that Wall Street has pretty much recovered from the losses it suffered last week, when fears that the Fed would hike rates and wind down stimulus support to ward off inflation saw the market turn in its worst weekly performance since last October.

The Dow had dipped into the red by late morning, but the Nasdaq composite index struck a fresh record high after having set one on Tuesday.

The S&P 500 is also sitting just below its record high.

O'Hare said the market is back to trading on expectations of rises in commodity prices and gravitating towards sectors that will benefit from the reopening of economies.

- Eurozone boom and bust - Back in Europe, a key survey showed eurozone business activity jumped at its fastest rate in 15 years this month, as a reopened economy unleashed pent-up demand in the single-currency area.

IHS Markit's PMI index -- which shows the earliest trends in manufacturing and service sectors -- said eurozone activity leapt from 57.1 in May to a booming 59.2 in June, far above the 50-point level that indicates growth.

The data set the scene for major growth, closing the chapter on a double-dip recession that came with the second wave lockdowns of last autumn and winter.

If the eurozone economy is booming, its stocks were a bust, with Frankfurt's DAX 30 index tumbling 1.2 percent, and the CAC 40 in Paris falling 0.9 percent.

"Good data is still perhaps to be viewed as bad news, since it pushes central banks towards gradually tightening policy," said market analyst Chris Beauchamp at online trading platform IG.

- Oil climbs - Oil prices extended gains to sit around multi-year highs on increasing optimism over demand as the world economy reopens and governments talk about easing quarantine measures, allowing easier overseas travel.

Analysts said the lack of progress on the Iran nuclear deal was also providing support as it puts off the return of supplies to the global market from the major producer.

Brent oil hit $76.02 per barrel, the highest level since late October 2018.

"With no prospect of an Iran oil deal in the coming weeks, talk of looser travel restrictions will inevitably provide an upward bias for prices, and a move towards $80 a barrel," said analyst Michael Hewson at CMC Markets UK.

- Key figures at 1530 GMT - New York - Dow: DOWN less than 0.1 percent at 33,931.76 points EURO STOXX 50: DOWN 0.9 percent at 4,084.74 London - FTSE 100: DOWN 0.2 percent at 7,074.06 (close) Frankfurt - DAX 30: DOWN 1.2 percent at 15,456.39 (close) Paris - CAC 40: DOWN 0.9 percent at 6,551.07 (close) Tokyo - Nikkei 225: FLAT at 28,874.89 (close) Hong Kong - Hang Seng Index: UP 1.8 percent at 28,817.07 (close) Shanghai - Composite: UP 0.3 percent at 3,566.22 (close) Euro/dollar: UP at $1.1946 from $1.1940 at 2100 GMT Pound/dollar: UP at $1.3965 from $1.3949 Euro/pound: DOWN at 85.53 pence from 85.60 pence Dollar/yen: UP at 110.85 Yen from 110.65 yenBrent North Sea crude: UP 1.2 percent at $75.69 per barrelWest Texas Intermediate: UP 1.1 percent at $73.65 per barrel