US stock markets staged a strong recovery overnight with the tech sector pushing the Nasdaq over 1% higher. Both the S&P 500 and Dow Jones gained around 1% with materials and mining rallying on positive news around Evergrande’s potential default.
Taper date nears
But all eyes were on the Federal Reserve with Chair Jerome Powell making no change to the US$120 billion per month bond-buying program, but flagged it may begin tapering before the end of this year.
Historically, this would see a sell-off in markets. However, the communication has been consistent whilst the economy appears to be on a much stronger footing than in previous attempts.
In addition, the dot plot chart now suggests as many as four rate hikes in 2022, albeit a loose forecast, which would likely be a boon for the Aussie dollar.
The debt ceiling issue has raised its head again with politicians showing faux concern about the prospect of default. There is little doubt the debt ceiling will be extended, hence why the market barely reacts.
Robinhood adds crypto, Facebook’s advertising hit
Shares in Robinhood (NASDAQ: HOOD) jumped over 10% after announcing it would be launching a crypto wallet, with the cheap trading app doubling down on the sector.
On the other hand, Facebook (NASDAQ: FB) shares fell as much as 4% after the company highlighted growing issues with its advertising platform following Apple’s (NASDAQ: AAPL) recent privacy update. The advertising giant also announced its CTO would be stepping down, transitioning to a ‘Senior Fellow’ role in the next year.
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US stock market movers
Here’s how other popular US stocks performed on Wednesday.
- MGM (NYSE: MGM) up 6.1%
- Square (NYSE: SQ) up 3.9%
- NVIDIA (NASDAQ: NVDA) up 3.3%
- Adobe (NASDAQ: ADBE) down 3.1%
- Peloton (NASDAQ: PTON) down 6.3%
- FedEx (NYSE: FDX) down 9.1%
Following the positive lead from US markets, the S&P/ASX 200 (ASX: XJO) is set to edge higher when the market opens on Thursday. For all the latest, check out my ASX 200 morning report.
