Dow, Nasdaq Edge Higher as Investors Prepare for Imminent Rate Hike
The US stock market rebounded last Friday after four consecutive days of losses. The Dow Jones Industrial Average gained 509.19 points, or 0.98%, to close at 52,573.29. The S&P 500 rose 0.86% to 7,656.98, and the Nasdaq Composite added 0.96%, finishing at 26,333.04.
The rebound was largely due to a decline in oil prices, which allowed investors to shrug off growing bets that the Federal Reserve will raise interest rates next week. The Fed meeting is expected to be closely watched, with policymakers widely anticipated to increase rates by a quarter point from the current 3.5%-3.75% range.
The market's reaction to the potential rate hike has been mixed, with some analysts predicting that it will have a manageable impact on equities. JPMorgan economists noted that a shallow hiking cycle should be manageable for equities, but warned that if inflation reaccelerates and the forward curve starts to price in a broader hiking cycle, equities may face more significant downside.