Wall St. rebounds as S&P 500, Dow gain amid inflation concerns, debt ceiling debate

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Wall St. rebounds as S&P 500, Dow gain amid inflation concerns, debt ceiling debate

On Wednesday, a swathe of Wall St. indices but tech-heavy Nasdaq had witnessed a partial rebound from prior session’s broad-based sell-off wave, as mounting concerns over a potential credit default in US Government by October 18 alongside remarks from Federal Reserve Chair Jerome Powell had pared some of the day’s earlier gains.

In point of fact, in the day’s decent bounce-back in the Wall St. was almost entirely catalysed by a ‘buy-the-dip’ approach from the investors following Tuesday’s wide-spread tottering, as defensives and cyclicals seemed to have triggered a bullish breeze in benchmark S&P 500 alongside trade-sensitive Dow, though tech-heavy Nasdaq had botched to mimic a similar fortune amid a gyration in investors’ appetite towards value stocks.

Earlier in the day, speaking at a European Central Bank event, US Fed’s Powell had expressed deep discontent over a sustenance of supply chain woes which in effect had been floating inflation indicators elevated for longer-than-anticipated, while US capital markets began to bolster shortly after his remarks.

Aside from that, tensions mounted over the Capitol Hill on frets of a potential credit default in US Govt by October 18, pressing the US Fed to lift up a cap on borrowing limit for the Government, which eventually kept a lid on the gains.

Wall St. gains as defensives rally

In the day’s Wall St. closing bell, trade-sensitive Dow gained 0.26 per cent to 34,390.72 and Wall St. bellwether S&P 500 added 0.16 per cent, while tech-heavy Nasdaq dipped 0.24 per cent to 14,512.44.

Meanwhile, referring to a rotation of investors’ appetite to value and defensives from growth stocks, a Senior Vice-President at Wealth Advisors in New York, Oliver Pursche said, “The same story we’ve seen for a couple of weeks.

Investors are concerned about three things: the eventual taper of bond purchases by the Fed, ongoing inflation with Chairman Powell saying it’s going to stick around longer than initially expected, and the debt ceiling issue that congress is grappling with”.