Wall Street stocks generally rose in early trading on Monday, as investors felt assured of the Fed’s leadership and entered a week of shortened holidays.
As of 10:19 am Eastern time, the S&P 500 index rose 0.9%. The Dow Jones Industrial Average rose 274 points, or 0.8%, to 35,876 points, and the Nasdaq Index rose 0.9%.
Technology companies led the gains. Apple rose 3.1%, and chip maker Nvidia rose 3.5%.
Retailers and other companies that rely on consumer spending have also made considerable gains. Gap rose 2.5% and Best Buy rose 4%. Retailers are on the cusp of a busy holiday shopping season. Traditionally, the Thanksgiving holiday has just passed.
Real estate and healthcare stocks are lagging behind the broader market.
After President Joe Biden stated that he would nominate Jerome Powell as chairman of the Federal Reserve for his second four-year term, the market felt relieved that this was a vote of confidence in Powell’s handling of central bank policy during the brutal destruction caused by the coronavirus pandemic. .
The central bank began to cut bond purchases that helped maintain low interest rates to support the economy and the market. The move to relax this support comes at a time when rising inflation envelopes the economic recovery. This allows investors to pay close attention to the Fed to see if the process is still going well, or whether the Fed will have to change its strategy in light of inflationary pressures.
Bond yields have risen. The 10-year U.S. Treasury bond yield rose to 1.59% from 1.54% late Friday. Banks that relied on higher yields to charge higher-profit loan interest earned gains. Bank of America rose 2.4%.
The U.S. dollar also strengthened against other currencies. The price of gold, a safe haven for investors, fell by 1.9%.
The European and Asian markets are mixed, as the return of the coronavirus outbreak has prompted some countries to adopt stricter preventive measures to contain another wave of pandemics.
Investors face relatively few economic updates. The National Association of Realtors reported on Monday that sales of homes occupied before October were surprisingly good. The US Department of Commerce will release October new home sales data and third-quarter gross domestic product data on Wednesday.
The US market will be closed on Thursday for the Thanksgiving holiday. They will also close early on Friday.
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