US stocks bounce back; Nasdaq surges 4% | Financial Markets News

The S&P 500 advanced after flirting with bear-market territory – defined by a 20 percent plunge from a recent record.

By Bloomberg

Stocks bounced back at the end of a chaotic week in financial markets, with a little help from Federal Reserve Chair Jerome Powell’s reassurance that bigger rates hikes would be off the table for now even after the hot inflation readings of the past few days.

For a market plagued by fears that more aggressive monetary tightening could tip the economy into a recession, Powell’s remarks ended up soothing frayed nerves and sparking a rebound in beaten-down risk assets. Despite the gains, sentiment remained fragile at a time when the Fed’s ability to fight price pressures without causing a hard landing may depend on factors outside the central bank’s control. Data Friday showed US consumer sentiment fell in early May to the lowest since 2011 amid inflation worries.

After sinking almost 20% from a record and flirting with a bear market, the S&P 500 saw a broad-based rally. It is still headed toward a sixth straight week of declines — the longest losing streak since June 2011. The Nasdaq 100 soared 4% amid gains in giants like Apple Inc., Microsoft Corp. and Amazon.com Inc. Meanwhile, Elon Musk caused chaos over his takeover offer for Twitter Inc., first claiming his bid was “temporarily on hold” and then maintaining he’s “still committed” to the deal — sending the social-media giant into a tailspin. Tesla Inc. jumped. Treasuries fell with the dollar.

Multiple Fibonacci levels are stacking up to provide support for the S&P 500

Expectations of a technical bounce in the S&P 500 are building after a selloff that shaved about $10 trillion from US equity values ​​in 18 weeks. One possible zone of support comes from a cluster of Fibonacci levels — which capture retracements of rallies in the American equity benchmark from 2020 Covid crash lows.

Equities, bonds, cash and gold all saw outflows in the week ended May 11, Bank of America Corp. strategists led by Michael Hartnett wrote in a note, citing EPFR Global data. At $1.1 billion, technology stocks suffered their biggest withdrawals so far this year, second only to financials, which lost $2.6 billion.

“The definition of true capitulation is investors selling what they love,” Hartnett said, citing assets like big tech, for example. “Fear and loathing suggest stocks are prone to an imminent bear-market rally, but we do not think ultimate lows have been reached.”

Some of the main moves in markets:

Stocks

  • The S&P 500 rose 2.7% as of 12:18 pm New York time
  • The Nasdaq 100 rose 4%
  • The Dow Jones Industrial Average rose 1.7%
  • The MSCI World index rose 2.5%

Currencies

  • The Bloomberg Dollar Spot Index fell 0.4%
  • The euro rose 0.3% to $1.0413
  • The British pound rose 0.4% to $1.2246
  • The Japanese yen fell 0.8% to 129.38 per dollar

Bonds

  • The yield on 10-year treasuries advanced eight basis points to 2.93%
  • Germany’s 10-year yield advanced 11 basis points to 0.95%
  • Britain’s 10-year yield advanced eight basis points to 1.74%

Commodities

  • West Texas Intermediate crude rose 3.9% to $110.25 a barrel
  • Gold futures fell 0.8% to $1,810 an ounce

–With assistance from Sunil Jagtiani, John Viljoen, Srinivasan Sivabalan, Vildana Hajric, Isabelle Lee and Akshay Chinchalkar.

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