New York, March 23 (BNA): Stocks rallied on Thursday to recoup huge losses from the previous day when markets fell at the close.
The S&P 500 was up 1.5% at midday. The Dow Jones Industrial Average was up 393 points, or 1.2%, at 32,423 noon ET, while the Nasdaq Composite was up 2.1%, the Associated Press reported.
The day before, stocks fell sharply after the Federal Reserve indicated that while the end may be near to rate hikes, it still does not expect a rate cut this year. Markets lost momentum after Fed Chairman Jerome Powell said that, along with insisting that he could continue to raise interest rates if inflation remains high.
But traders on Thursday are still very much betting that the Fed will cut interest rates later this year. Such cuts can boost markets, increasing the prices of stocks, bonds, and other investments. They will take pressure off the economy, but they may give inflation more fuel.
Big tech and other high-growth stocks that tend to make the most of lower rates have been in the lead on Wall Street. Nvidia rose 3.4%, Microsoft 3% and Apple 1.8%.
Most stocks in the financial industry rose after falling the previous day. But First Republic Bank, which has been at the center of investor attention in the past few weeks due to the industry crisis, has been choppy. It recently fell 4.9% after rising nearly 10% in the morning.
The Fed raised its key rate overnight to a range of 4.75% to 5%, up from nearly zero at the start of last year. Policy makers have indicated that they may raise interest rates again this year before holding them steady until the end of this year.
On Wall Street, Coinbase Global shares fell 11.7% after the cryptocurrency trading platform said it was warned by the US Securities and Exchange Commission that it could face charges of violating federal securities laws.
In the US bond market, which has been home to some of the wildest moves on Wall Street this month, returns have been mixed.
The yield on the two-year Treasury fell to 3.90% from 3.97% late Wednesday. It was higher than 5% earlier this month.
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