US: Stocks bounce back from rout, Dow Jones up 1.8%

[NEW YORK] Wall Street stocks rallied on Monday, staging a strong bounceback from last week's rout that was led by financial, industrial and energy shares.

"The market is correcting the overcorrection from last week," Maris Ogg of Tower Bridge Advisors said of Monday's session.

The Dow last week suffered its worst week since October 2020, dropping 3.4 per cent, due in part to unease at the Federal Reserve's shift towards a more hawkish stance on monetary policy.

But the blue-chip index led the market Monday, winning 1.8 per cent to finish at 33,876.97.

The broad-based S&P 500 gained 1.4 per cent to 4,224.79, while the tech-rich Nasdaq Composite Index advanced 0.8 per cent to 14,141.48.

Investors were rattled last week when the Fed moved up its forecasts for raising interest rates, while still arguing that consumer price increases were transient.

John Williams, head of the Federal Reserve Bank of New York, said at a gathering Monday that he still thinks higher prices are due "mostly" to factors connected with the reopening of the economy. These stresses should abate over time, but the Fed will continue to monitor incoming data, he said.

Fed Chair Jerome Powell is scheduled to appear before a congressional panel on Tuesday. This week's calendar also includes economic reports on durable goods orders and new home sales.

Investors are also monitoring talks in Washington on a bipartisan infrastructure package.

AFP