NEW YORK: Wall Street stocks recovered from early session losses on Thursday as investors weighed in on the economic implications of the Federal Reserve’s surprisingly aggressive interest rate environment, while oil prices rose amid supply shortage concerns from the Russia-Russia conflict. Ukraine.

The Fed on Wednesday announced a quarter of a percentage point hike in interest rates to near zero, the first hike in nearly three years in a bid to curb rising prices. The US central bank also forecast six rate hikes of similar magnitude this year, raising concerns among traders about the effect on economic growth.

US Treasury yields were just below their three-year high on Thursday and the closely watched yield curve steepened, having previously been at its flattest level in more than two years.

The 10-year and 2-year benchmark returns were 2.1653% and 1.969%, respectively.

“The big surprise yesterday was the dot plot,” said Thomas Hayes, chairman of Great Hill Capital in New York, referring to the Fed’s rate forecast.

“It was a mild rise, but an aggressive rhetoric and outlook. We believe that if they even come close to their projections, they would invert the yield curve and trigger a guaranteed recession.”

On Wall Street, the three main indices made up for early losses, driven by the healthcare, consumer discretionary, technology and financial sectors.

The Dow Jones Industrial Average rose 1.23% to 34,480.76, the S&P 500 gained 1.23% to 4,411.67 and the Nasdaq Composite gained 1.33% to 13,614.78.

“We had a relief rally yesterday and the market is digesting that today, consolidating a bit and trying to take solace in reality versus expectations in terms of what the Fed is forecasting,” Hayes added.

European equities also gained in choppy trading following the Fed rate hike and a similar move by the Bank of England.

The pan-European STOXX 600 index rose 0.45%, while the MSCI index of stocks around the world gained 1.77%.

Oil prices rose more than 8% and continued a series of wild daily swings as the market recovered from several days of losses due to a renewed focus on supply shortages in the coming weeks due to sanctions against Russia.

Benchmark Brent oil futures were 8.79% higher at $106.64 a barrel, the highest percentage gain since mid-2020.

US West Texas Intermediate (WTI) crude rose 8.35% to $102.98 a barrel.

The dollar index, which measures the dollar’s strength against six trading currencies, fell 0.47% to 98.026.

Gold rose 1% as US dollar and government bond yields fell. Spot gold rose 0.7% to $1,942.04 an ounce, while US gold futures rose 1.62% to $1,939.00 an ounce.

This post Oil Price Rise: Wall Street Shares, Oil Prices Rise After Aggressive Fed Raise Outlook

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