U.S. stocks bounce back after sharp drop on economic concerns

US stocks rebounded on Friday morning after tumbling the night before fears that economic activity will be dampened by interest rate hikes aimed at calming inflation.

After retreating on Thursday, benchmarks rose early in the morning. As of 9:47 a.m. EST Friday, the Dow rose 94 points, or 0.3%, to 30,021. The S&P 500 climbed 22 points, or 59%, and the strong-component Nasdaq Composite technology, gained 117 points, or 1%.

Wall Street’s S&P 500 index lost 3.3% on Thursday and other major benchmarks also fell after Britain’s central bank followed the The Federal Reserve raises its key rate. The central banks of Switzerland and Taiwan also raised their rates.

Investors fear that measures to control inflation, which is at four-decade highs, could tip the United States and other major economies into recession.

“Pain is inflicted almost everywhere, and sharing does nothing to improve it,” Mizuho Bank’s Tan Boon Heng said in a report.

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On Thursday, the Dow lost 2.4% and the Nasdaq fell 4.1%.

At 23.6% below its record of January 3, the S&P remains in bear market territory. The drop of more than 20% erase 2021 gainsone of the best years on Wall Street this century.

Along with rising borrowing costs, some of the trillions of dollars in bonds purchased by the Fed to inject cash into the US financial system during the pandemic are being allowed off its balance sheet. This should put upward pressure on market interest rates.

Fewer American workers applied for unemployment benefits last week than a week earlier.

President Joe Biden told The Associated Press on Thursday that he sees reason for optimism.

A recession is “not inevitable” Biden said.

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