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Home » Markets News » Wall Street Surges as Risk Sentiment Improves

Wall Street Surges as Risk Sentiment Improves

  • August 7, 2024
  • 351

On Wednesday, stocks on Wall Street gained strongly, bolstered by the return of risk appetite even though sentiment is still fragile.

The NASDAQ Composite surged 260 points, or 1.5%, the S&P 500 jumped 66 points, or 1.2%, and the dow jones Industrial Average rose 225 points, or 0.6%.

On Wednesday, risk sentiment was bolstered by comments by a senior Bank of Japan official that downplayed the bank’s intentions to hike interest rates while markets were still volatile.

The BOJ’s rate hike of 0.25% last month had led to a global stock rout as investors unwound their carry trade positions.

Sentiment towards risk-driven assets stayed frail amid persistent worries over middling earnings and slowing growth.

Goldman Sachs said that although its FSI (Financial Stress Index) has tightened substantially over the last two days it was still within normal historical levels.

Goldman economists said most of the tightening had been caused by higher volatility expected in the bond and equity markets, while conditions in near-term funding markets have generally remained stable.

They added that although market stress was noticeably higher, their FSI suggested that there have thus far been no serious market disruptions that would result in policymakers intervening.

Walt Disney stock dropped nearly 3% after the entertainment giant reported profits had dropped.

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