Stocks Recover as Fed Rate Hike Bets Ease
Stock markets mostly rose on Monday as investors reevaluated their bets on an interest rate hike by the Federal Reserve, which could dampen economic growth. The US central bank's decision to hold off on raising borrowing costs is seen as a welcome relief for investors.
The dollar clawed back some of its losses from Friday after the US jobs data showed 23,000 jobs were lost last month, confounding expectations and suggesting the economy was slowing down. Oil prices gained around two percent amid tensions between the United States and Iran over a deal to reopen the Strait of Hormuz.
The focus now shifts to this week's US consumer inflation data, which will provide more clues on the outlook for the world's largest economy. Ipek Ozkardeskaya, senior analyst at Swissquote, said that people who lose their jobs and those with slower wage growth will be tempted to spend less, 'tame inflationary pressures' and help the Federal Reserve keep rates unchanged.
Tehran insists on retaining control of the waterway through which about one-fifth of the world's oil passes, and wants to charge tolls for passage. The Iran conflict remains a key source of concern for markets, with AJ Bell investment director Russ Mould saying that 'a lasting resolution seems a distant prospect at this point'.