Wall Street rallies, Treasury yields rise on strong economic data, Fed resolve

By Stephen Culp

3 minute read

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A trader walks on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., August 3, 2022. REUTERS/Andrew Kelly

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NEW YORK, Aug 3 (Reuters) – U.S. stocks rose sharply and Treasury yields touched two-week highs on Wednesday as robust economic data, easing geopolitical concerns and generally upbeat corporate earnings boosted investor risk appetite.

All three major U.S. stock indexes were higher and benchmark 10-year Treasury yields gained ground.

Economic data showed an unexpected acceleration of services activity and a robust increase in factory orders read more , suggesting that the economy was healthy enough to withstand the hawkish monetary policy from the U.S. Federal Reserve.

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“While we haven’t seen a definitive rollover in inflation, (the Fed) can afford to be a little hawkish,” said Joseph Sroka, chief investment officer at NovaPoint in Atlanta. “The Fed’s been able to be aggressive because the economy is handling it well.”

St. Louis Fed President James Bullard underscored that hawkishness by re-iterating the central bank’s intention to “be tough” on inflation until it cools down to the Fed’s average annual 2% target. read more

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