Dow jumps over 500 points, rebounding after Wall Streets terrible week

Wall Street’s benchmark indexes jumped on Monday, rebounding from a week of heavy losses as investors remained optimistic about a soft landing scenario for the US economy ahead of a crucial inflation report later in the week.In recent trading, the Dow Jones Industrial Average soared 564 points, or 1.4%, to 40,911.The S&P 500 gained 1%, and the Nasdaq advanced 0.8%.Most megacap and growth stocks rose after falling sharply last week, with Tesla and Nvidia adding more than 3% each.Major chip stocks, which also saw heavy selling last week, regained some ground with the Philadelphia Semiconductor Index up 1.8% after tumbling more than 4% on Friday.Ten of the 11 major S&P 500 sectors were trading higher, with consumer discretionary .SPLRCD and information technology rising more than 1% each.Global markets were rattled last week as uncertainty over the US economy’s health rippled across assets, adding fuel to an already volatile period that has investors grappling with a shift in the Federal Reserve’s policy and worries over stretched valuations.Friday’s weaker-than-expected August jobs data spurred worries on economic growth, driving the Nasdaq Composite to its worst week since January 2022, while the S&P 500 saw its biggest weekly drop since March 2023.Markets will be squarely focused on US consumer prices data on Wednesday that is expected to show a moderation in headline inflation in August to 2.6% on a yearly basis, while on a monthly basis it is expected to remain unchanged at 0.2%.Ronald Temple, chief market strategist at Lazard said that while the inflation battle is not fully won, “it appears safe to say that the Fed should feel comfortable that inflation is sufficiently under control to begin moving monetary policy in a less restrictive direction.”The report will be followed by producer prices data on Thursday.Money markets currently see a 73% chance of a 25-basis-point rate reduction by the Fed next week and expect ...