U.S. stocks closed higher on Tuesday after a three-day holiday weekend, following the worst weekly performance for equities in more than two years.
Investors have been focusing on the surge in inflation which has led the Federal Reserve and other central banks to raise interest rates, as well as on the war in Ukraine that has crippled grain exports and triggered sanctions on energy exporter Russia.
Some questioned whether stocks could manage a sustainable rebound at this point, considering the paucity of new signals about the inflation outlook, or the underlying growth picture, that could trigger a meaningful shift in investors’ expectations about the pace of the Fed’s quantitative tightening.
Meanwhile, President Joe Biden said Monday that he will decide by the end of the week whether to order a holiday on the federal gasoline tax, as he also said a U.S. recession was not inevitable. Biden spoke with former U.S. Treasury Secretary Larry Summers, who said the jobless rate needs to spike to lower inflation.
A brutal selloff for crypto assets relented over the weekend, with the price of bitcoin up 2.1% near $21,100 after dipping below the $18,000 threshold for the first time since December 2020.
In U.S. economic data, existing-home sales fell 3.4% to a seasonally adjusted annual rate of 5.41 million in May, the National Association of Realtors said Tuesday. Compared with May 2021, home sales were down 8.6%. The decline was in line with the forecast of economists polled by the Wall Street Journal.
Looking ahead, investors are expecting to hear more from Fed President Jerome Powell when he testifies before the Senate Banking Committee on Wednesday…….[read more]
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