Wall Street Rebounds on Strong Economic Data Despite Hawkish Fed Outlook
U.S. stocks posted a notable rebound as investor concerns over artificial intelligence-related disruptions eased, while a fresh wave of economic data signaled continued resilience in the U.S. economy.
Nearly 320 stocks within the S&P 500 index advanced, even as the Federal Reserve’s latest meeting minutes revealed that several policymakers may consider further interest rate hikes if inflation remains above the central bank’s target.
Following a sharp sell-off driven by AI-related fears in recent weeks, investors are now searching for signs that the market may have reached a bottom. Semiconductor stocks rose by 1%, while an exchange-traded fund tracking software companies gained 1.3%, indicating renewed interest in the technology sector.
Although concerns surrounding artificial intelligence have weighed on stock valuations across multiple sectors, some investors are actively seeking buying opportunities amid recent market declines.
Stock Market and Precious Metals Movements
The S&P 500 climbed to approximately 6,880 points, while the yield on 10-year U.S. Treasury notes increased by 2 basis points to 4.08%. Meanwhile, a $16 billion auction of 20-year Treasury bonds saw relatively weak demand, and the U.S. dollar rose by 0.5%.
Oil prices surged as traders evaluated whether ongoing negotiations between the United States and Iran would be sufficient to avoid military conflict, following reports suggesting that a potential U.S. intervention could occur sooner than expected.
Gold prices remained stable near the $5,000 level. Despite Wednesday’s gains, the S&P 500 continues to struggle to break above the key 7,000-point resistance level, which it has been attempting to surpass since October.
Accelerated Selling of U.S. Equities
Bank of America clients sold U.S. equities last week, with outflows from individual stocks reaching $8.3 billion — marking the third-largest withdrawal since data tracking began in 2008.
Outflows were recorded across nine of the eleven major sectors, led by financials and consumer staples. Industrial, technology, and consumer discretionary sectors also experienced significant capital withdrawals.
As markets continue to balance strong economic fundamentals against a potentially hawkish Federal Reserve stance, investors remain cautious about the outlook for U.S. equities in the coming months.
