© Reuters. FILE PHOTO: A man wearing a protective mask, amid the COVID-19 outbreak, is reflected on an electronic board displaying stock prices outside a brokerage in Tokyo, Japan September 21, 2021. REUTERS / Kim Kyung-Hoon
By Caroline Valetkevitch
NEW YORK (Reuters) – Shares on global indices rose sharply on Tuesday, with major U.S. equity indices each ending up more than 2% after a recent selloff, while the Japanese yen fell against the U.S. dollar at its lowest level since October 1998.
Wall Street soared as participants returned from a long weekend, with investors buying growth stocks in megacaps and energy companies hit last week by global economic concerns.
Energy shares rose along with oil prices. Oil gained on strong summer fuel demand.
“After consecutive weeks of 5% declines, you’ve pushed the ball underwater enough now that we’re getting a rebound,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.
But, Nolte said, “interest rates keep going up. Oil keeps going up.”
Expectations of interest rate hikes from major central banks and fears of a global recession kept investors on edge. Central banks should tighten their policies to fight against high inflation.
increased them 641.47 points, or 2.15%, to 30,530.25, gained them 89.95 points, or 2.45%, to 3,764.79 and added them 270.95 points, or 2.51%, to 11,069.30.
The pan-European index rose 0.35% and the MSCI gauge of stocks across the world gained 1.83%.
Yields on US Treasuries rose as the risk aversion mode that weighed on US markets last week took a break.
Benchmark 10-year yields were at 3.305%, up from their close of 3.239% at the end of last week.
All eyes are now on Fed Chairman Jerome Powell’s testimony before the Senate Banking Committee on Wednesday for clues on rates.
Goldman Sachs (NYSE:) said it now believes there is a 30% chance that the US economy will tip into a recession over the next year, up from its previous forecast of 15% .
In the foreign exchange market, the Japanese yen plunged against the US dollar to 136.330 to the dollar.
Japanese Prime Minister Fumio Kishida said the central bank should maintain its current ultra-loose monetary policy. This makes it an outlier among other major central banks.
futures rose 52 cents, or 0.5%, to settle at $114.65 a barrel. The US West Texas Intermediate (WTI) crude contract for July expired on Tuesday, closing at $110.65, with a gain of $1.09, or 1%. The most active August contract rose $1.53 to $109.52.
fell 0.3% to $1,832.27 an ounce.