Shares in key U.S. markets, Wall Street bounced back from an early loss session as investors digested the impact of an aggressive rate hike by the Federal Reserve (Fed) on the economy.
The Fed announced a 0.25% hike from near -zero interest rates on Wednesday, the first hike in 3 years in a bid to curb price increases.
The Fed is also projecting six more rate hikes this year, further sparking investor concerns about the impact on economic growth.
U.S. treasury yields were below a 3 -year high on Thursday while the yield curve rose from a flat level in more than 2 years.
The 10 -year and 2 -year yield benchmarks were at 2.1653% and 1.969%, respectively.
According to Thomas Hayes, chairman of New York’s Great Hill Capital, the Fed’s projection was a big surprise, it was a dovish rise but rhetorically hawkish.
He added that there is an expectation that when the Fed meets the projection, the yield curve will reverse and a recession is guaranteed.
Wall Street’s focus is on key indices that bounced from losses driven by healthcare, consumer needs, technology and finance sectors.
The Dow Jones Industrial average index rose 1.23% at 34,480.76, the S&P 500 hit 1.23% at 4,411.67 and the Nasdaq Composite added 1.33% at 13,614.78.
European stocks also posted gains despite a volatile trading session following rate hikes by the Fed and the Bank of England (BOE).
The pan-European STOXX 600 index was up 0.45% while MSCI’s worldwide benchmark was up 1.77%.
Meanwhile, oil prices rose more than 8% with benchmark Brent crude futures up 8.79% at $ 106.64 a barrel and West Texas Intermediate (WTI) crude up 8.35% at $ 102.98 a barrel.
The dollar index, which measures a total of 6 other currencies, was down 0.47% at 98.026.
Gold rose 1% with spot gold adding 0.7% at $ 1,942.04 per ounce and US gold futures reaching 1.62% at $ 1,939 per ounce.
