Wall Street indexes rose sharply on Thursday as traders sought to offset 2022’s massive losses, which are the worst since 2008.
Despite today’s optimistic indicators, caution prevails because there is no room for optimism for 2023 on a number of economic issues, such as inflationary pressures and whether interest rate hikes will cause the economy to slow.
The Dow Jones Industrial Average increased 1.05%, or 345 points, to 33,221 points in this environment. The S&P 500 jumped 1.75% to 3,849 points, while the Nasdaq rose 2.59% to 10,478 points.
After four consecutive days of losses, Apple stock rose 2.83%.
With one session remaining (tomorrow’s) till the terrible 2022 is “gone,” US indices are attempting to move higher. This year is shaping up to be the worst since the 2008 financial crisis.
Today’s bullish movement is largely based on Labor Ministry statistics on new unemployment benefit applications (an increase to 225,000), which can put a “brake” on the scope of the central bank’s forthcoming interest rate hikes under certain conditions.
It should be highlighted that the high interest rates (4.25% – 4.5%), which are intended to reduce historical inflation, have a detrimental influence on the economy and labor market, hurting growth prospects.
For this reason, many economists are particularly concerned about 2023, fearing that chronically high interest rates, combined with geopolitical concerns and changes in China, will cause GDP to decrease rather than slow.
As a result, the indexes lost between 4% and 8% in December, making it the worst month since September 2022, i.e. the previous four months.