NEW YORK (AP) – Stocks rose in morning trading on Wall Street on Tuesday after a day of heavy selling that pushed the Dow Jones Industrial Average into a bear market to join other major US indexes.
The S&P 500 was up 1% as of 10:22 AM ET. The Dow rose 219 points, or 0.8 percent, to 29,498 points, and the Nasdaq rose 1.4 percent.
Energy stocks were among the biggest gainers as US crude oil prices rose 2.8%. Exxon Mobil shares rose 3.1 percent. Technology stocks and retailers also helped lead the gains. Apple shares rose 1.7 percent and Home Depot 1.8 percent.
The gains come amid an extended slump in stocks. With only a few days left in September, stocks are headed for another month of losses as markets fear high interest rates used to fight inflation could push the economy into recession.
The S&P 500 fell more than 6% in September and has been in a bear market since June, when it fell more than 20% from its all-time high on Jan. 1. 4. A drop in the Dow on Monday put it in the same company as the benchmark and the high-tech Nasdaq.
Central banks around the world have been raising interest rates in an effort to make borrowing more expensive and cool the hottest inflation in decades. The Federal Reserve was particularly aggressive and raised its benchmark rate, which affects many consumer and business loans, again last week. It now falls in the range of 3% to 3.25%. It was almost zero at the start of the year.
The Fed also released forecasts that the benchmark interest rate could reach 4.4% by the end of the year, a full percentage point higher than was projected in June.
Wall Street is concerned that the Fed will hit the brakes hard on an already slowing economy and turn it into a recession. Higher interest rates have affected stocks, especially more expensive technology companies, which tend to look less attractive to investors as interest rates rise.
Bond yields were mixed on Tuesday. The yield on the two-year Treasury, which tends to follow expectations of Fed action, fell to 4.28% from 4.34% late Monday. It is trading at its highest level since 2007. The yield on 10-year Treasury notes, which influences mortgage rates, rose to 3.95% from 3.93%.
Fears of an economic recession have increased as inflation rates continue to rise. Investors will be watching the next round of corporate earnings closely to get a better idea of how companies are dealing with inflation. Companies will start reporting their latest quarterly results in early October.
Investors are also closely watching the latest economic updates. Consumer confidence remains strong, despite rising prices for everything from food to clothing. The latest September consumer confidence report from The Conference Board showed that confidence was stronger than economists expected.
The government will release its weekly report on unemployment benefits on Thursday, along with an updated report on second-quarter gross domestic product. On Friday, the government will release another report on personal income and spending that will help provide more details on where and how inflation affects consumer spending.
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