The Dow Jones Industrial Average made a remarkable comeback late on Wednesday, surging more than 1,000 points for the first time.
US stocks had plummeted before Christmas after President Donald Trump worried investors by criticizing the US central bank, but strong holiday sales helped relieve concerns about the state of the US economy. Indeed, holiday sales increased 5.1 percent on the 2017 season to over $850 billion (€747 billion). According to a report from Mastercard, this is the strongest gain in six years.
At the same time, S&P 500 retailing index and Nasdaq recorded their strongest daily percentage gains in almost ten years. Online retailer Amazon hailed a “record-breaking” season as shares climbed 9.4 percent.
Despite this, US markets were still on track for their worst December since the height of the Great Depression in 1931.
Asian markets also rallied, buoyed by the positive news from Wall Street. Japan’s Nikkei index rose 4% as it opened on Thursday.
“Thanks to the sharp rebound in US shares, it is increasingly possible that Japanese stocks will end the year on a bullish note,” said Yoshihiro Ito, chief strategist of Okasan Online Securities, using a finance term to describe when prices are rising.
This also pushed shares across Asia and in Australia.
Trump trade wars, insults shake confidence
International markets had been wobbling in the days before Christmas after Trump criticized Jerome Powell, the chairman of the US Federal Reserve. Though appointed by Trump, the Fed is not beholden to the White House and has slowly raised interest rates, to the president’s consternation.
Trump’s condemnation of the Fed and his escalating trade disputes have led to shaky confidence in the US economy. However, Wall Street was able to bounce back after the White House indicated on Wednesday that Powell would not be removed from his post.
es/kms (AFP, Reuters)
Each evening at 1830 UTC, DW’s editors send out a selection of the day’s hard news and quality feature journalism. You can sign up to receive it directly here.
Credit: Source link