Stocks jump after S&P 500 slips into 2022 low

US stocks rose sharply on Tuesday after S&P 500 fell to a new closing low The Dow Jones Industrial Average has officially entered a bear market – down 20% or more from another broad market index high.

The S&P 500 rose 1.1% early in the session, while the Dow Jones Industrial added more than 200 points, or 0.7%. Technology stocks led the way higher, with the heavy Nasdaq Composite Index up 1.5%.

On Tuesday, Chicago Fed President Charles Evans said while speaking at a forum in London that the US central bank You will need to raise interest rates by at least another percentage point This year, however, he does not see the labor market heading into “stagnation-like” conditions.

Tuesday’s moves come as Wall Street increasingly expects the Fed’s rate hike campaign to fight inflation It leads to an economic downturn. Chairman Jerome Powell repeatedly Warn of some “pain” In a speech last week after the central bank’s latest policy announcement.

“We have always understood that restoring price stability while achieving a relatively modest decrease in unemployment and a soft landing would be very difficult and we do not know if this process will lead to a recession or if so, how important this recession is,” he said.

CBOE Volatility Index (^ VIX), which measures Wall Street’s expectations of short-term market volatility, remained well above the key 30 level, posting its highest reading since June 17. Highest since April 2010 – And two-year Treasuries are above 4.2%, the highest in 15 years.

With key averages dropping below their June 16 lows, strategists are wondering how low indices should fall as Fed policymakers continue to raise interest rates, and on the corporate side, analysts are beginning to cut earnings expectations.

Mike Wilson of Morgan Stanley, among the stock’s most bearish analysts, expects an acceleration in downward earnings revisions in the coming months will push stocks lower, forecasting the S&P 500 will reach the 3000-3400 range later this fall.

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Meanwhile, Chris Larkin, managing director of trading at E*TRADE at Morgan Stanley, was more upbeat.

He said on a note: “Many traders and investors may not have noticed that last week’s slide brought the SPX back below the bear market threshold, and as such an unwelcome milestone, historical sentiment shows that the worst is often over by Time SPX first reached the threshold of a bear market – which in this case was just over three months ago.”

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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter Tweet embed

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