After rally Tuesday, US stocks fell after the US stock market rallied Tuesday, the US stock market was back to normal Wednesday morning after rallying Tuesday on the back of their worst week since March 2020, giving investors a reprieve from the recent swings of whipsaw trading that had sent stocks and cryptocurrencies falling.
The S&P 500 gained 89.95 points, or 2.4%, to 3764.79, while the Dow Jones Industrial Average added 641.47, or 2.1%, to 30530.25. The Nasdaq Composite Index rose by 270.95 points, or 2.5%, to 11069.30.
The U.S. stock market was closed Monday for the Juneteenth federal holiday. The investors scrambled to unload riskier assets amid growing fears that central bankers will plunge the U.S. economy into a recession.
The S&P 500 finished the week 5.8% lower, its largest one-week decline in more than two years.
In the last few weeks, the stock prices have plummeted as investors adjust to the higher interest rates that the Federal ReserveFederal Reserve and other central banks are increasingly doingling out to temper record high inflation.
The Fed risks slowing economic growth and causing a recession, according to investors. The first of two days of testimony as part of the central bank's semiannual monetary policy report, investors are looking forward to what Fed Chairman Jerome Powell will tell Congress on Wednesday.
For now, the fundamental catalyst for a rebound seems fragile, with all eyes on Fed Chair Jerome Powell's testimony ahead to further drive expectations of policy outlook and inflation, according to Yeap Jun Rong, market strategist at IG in Singapore.
The surge in energy prices after Russia invaded Ukraine has worsened the worries over inflation and interest rates. The price of U.S. crude oil is up 52% for the year. That has taken a bigger bite out of people's wallets at the gas pump and has caused a slowdown in spending elsewhere.