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After the last sharp drop, the stock market situation has partially stabilized, and stocks on the New York Stock Exchange opened higher on Tuesday. This sentiment was partially supported by representatives of the US Central Bank (Fed), who believe that the US economy should not go into recession. The news was reported by AFP and Reuters.
About 30 minutes into trading on Wall Street Tuesday, the main index of the Dow Jones Industrial Average on the New York Stock Exchange rose 0.7% to 38,979.82 points. The S&P 500 rose 0.8% to 5,226.56 points, and the Nasdaq Composite Technology Index rose 0.4% to 16,268.54 points.
On Monday (August 5), both the S&P 500 and the Nasdaq Composite fell by at least 3%, with market sentiment affected by unfavorable data on the development of the US labor market, with a sharp drop in job creation and an unexpected increase in the unemployment rate to 4.1% to 4.3% in July. The stock market reacted to this last Friday, and stock prices continued to fall sharply at the beginning of this week.
However, Fed officials said on Monday that worse-than-expected labor market data does not mean the economy is headed for a recession, although they warned that the Fed would need to cut interest rates to avoid that. Markets expect the Fed to cut interest rates by 50 basis points in September, with a 75% chance of that happening. They expect the main interest rate to be between 4.25% and 4.50% by the end of this year.
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