US stocks jump 2% after recent sale; the yen is falling against the dollar

  • S&P 500 ends up with more than 2%
  • US government interest rates are rising
  • The yen plunges against the dollar
  • Crude oil settles higher

NEW YORK, June 21 (Reuters) – Global index stocks rose sharply on Tuesday, with major US stock indices each ending more than 2% after a recent sale, while the Japanese yen fell against the US dollar to its lowest level since October 1998 .

Wall Street climbed when participants returned from a long weekend, with investors buying up shares in megacap growth and energy companies hit last week by global economic concerns. read more

Energy stocks climbed along with oil prices. Oil increased on high demand for fuel in the summer. read more

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“After back-to-back weeks of 5% decline, you’ve pushed the ball far enough underwater now that we’re bouncing,” said Paul Nolte, portfolio manager at Kingsview Investment Management in Chicago.

But, Nolte said, “interest rates are still rising. Oil is still rising.”

Expectations of interest rate hikes from major central banks and concerns about a global recession have kept investors on edge. Central banks are expected to tighten policies to combat high inflation.

The Dow Jones Industrial Average (.DJI) rose 641.47 points, or 2.15%, to 30,530.25, the S&P 500 (.SPX) rose 89.95 points, or 2.45%, to 3,764.79 and Nasdaq Composite added to 5.70IC. 2.51% to 11,069.30.

The pan-European STOXX 600 index (.STOXX) rose 0.35% and MSCI’s target for stocks across the globe (.MIWD00000PUS) rose 1.83%.

US government bond yields were higher as the risk-off mode that weighed on US markets last week took a breather.

The reference rate for 10 years was 3.305%, up from 3.239% at the end of last week.

All eyes are now on Fed Chairman Jerome Powell’s testimony to the Senate Banking Committee on Wednesday for clues about interest rates.

Goldman Sachs has said it now believes there is a 30% chance that the US economy will tip into a recession within the next year, up from the previous forecast of 15%. read more

In the foreign exchange market, the Japanese yen plunged against the US dollar to 136,330 per dollar. read more

Japanese Prime Minister Fumio Kishida said the central bank should maintain its current ultra-loose monetary policy. This makes it an outsider among other major central banks. read more

Futures on Brent oil rose 52 cents, or 0.5%, to settle at $ 114.65 a barrel. The US West Texas Intermediate (WTI) oil contract for July expired on Tuesday, ending at $ 110.65, with a gain of $ 1.09, or 1%. The more active August contract was up $ 1.53 to $ 109.52.

Spot gold fell 0.3% to $ 1,832.27 per ounce.

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Further reporting by Elizabeth Howcroft in London; also by Devik Jain and Anisha Sircar; Editing Louise Heavens, Chizu Nomiyama, Will Dunham and Mark Heinrich

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