A bait and switch from US Treasury Secretary Janet Yellen helped the European markets try and recover some of Tuesday’s losses after the bell.
Yellen had said on Tuesday that ‘it may be that interest rates have to rise somewhat’ to prevent the post-covid economy from overheating. A statement, obviously, that didn’t go down well with investors, who were already fretting over the impact of the ongoing chip shortage on tech and car stocks.
Such was the reaction that the former Fed chair issued a correction, of sorts, assuring the markets that a rate hike is neither something she is ‘predicting or recommending’.
If Europe’s open is anything to go by, that has been enough to put the issue to bed – for now, anyway.
With especially strong growth in its sizeable mining sector, the FTSE climbed 1%. Not enough for the UK index to get back to 7,000, but with the gap that remains – 20 or so points – eminently clearable if things go its way in the rest of the week.
The DAX, which was hammered by its chip-lacking car manufacturers on Tuesday, managed to get itself back above 15,000 with a 1.3% increase, while the CAC was just under 6,270 following a 1.3% rise of its own.
Recovering enough by the end of last night to close above 34,000, the Dow Jones could find itself testing its all-time highs this afternoon. The futures have the Dow rising 0.3% to 34,230 – if it can scrounge together a few more points once the bell actually rings, it will match the intraday peak set in mid-April.
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