Wall Street rallied to its best day since late July as falling bond yields eased some of the pressure that’s battered markets. The S&P 500 rose 2.6% Monday, the latest swing for a scattershot market that’s been mostly falling this year on worries about a possible global recession. The S&P 500 rose 92.81 points to 3,678.43. The Dow Jones Industrial Average rose 765.38 points, or 2.7%, to 29,490.89. The Nasdaq rose 239.82 points, or 2.3%, to 10,815.43. A report on US manufacturing from the Institute for Supply Management came in weaker than expected, as did a separate report on construction spending across the country. That could mean the Federal Reserve won’t have to be so aggressive about raising interest rates to beat down the high inflation damaging households’ finances, but analysts still see plenty more turbulence ahead, the AP reports.
Giving some respite to stocks was a drop in Treasury yields, which have been surging at market-shaking speed for most of the year. The yield on the 10-year Treasury, which helps set rates for mortgages and many other kinds of loans, fell to 3.66% from 3.83% late Friday. It got as high as 4% last week after starting the year at just 1.51%. Crude oil prices jumped Monday amid speculation big oil-producing countries could soon announce cuts to production. The lift helped stocks of energy-producing companies to big gains. Exxon Mobil leaped 5.3%, and Chevron climbed 5.7%. Monday’s rally came despite a 8.6% drop for Tesla, one of the most influential stocks on Wall Street because of its massive market value. The maker of electric vehicles delivered fewer vehicles from July through September than investors expected.
More turbulence for markets could arrive Friday, when the latest update on the US jobs market hits. Along with its reports on inflation, the US government’s monthly jobs report has been one of the most highly anticipated pieces of data on Wall Street. It will be the last jobs report before the Fed makes its next decision on interest rates, scheduled for Nov. 2, and continued strength would give the central bank more reason to keep hiking. Traders say the likeliest move is a fourth straight increase of a whopping three-quarters of a percentage point, triple the usual move. For markets to make a meaningful move higher, many investors say they need to see a break in inflation that gets the Fed to ease off its aggressive path.
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