MPP Sarah Jama asked to leave Ontario legislature for wearing keffiyeh
MPP Sarah Jama was asked to leave the Legislative Assembly of Ontario by House Speaker Ted Arnott on Thursday for wearing a keffiyeh, a garment that is banned at Queen’s Park.
Wall Street rallied Tuesday after the U.S. Federal Reserve signalled last week's stunningly strong jobs report won't by itself change where interest rates are heading, as some investors had feared.
The S&P 500 climbed 1.3% following a shaky day where stocks pinballed between losses and gains as Fed Chair Jerome Powell gave his first public comments since raising rates last week. The Dow Jones Industrial Average rose 265 points, or 0.8%, while the Nasdaq composite jumped 1.9%.
High inflation and how high the Fed will take interest rates to combat it have been at the center of Wall Street's wild movements for the last year. Powell said on Tuesday that progress is being made on inflation, though a long battle remains.
That echoed similar comments he made last week, after the Fed approved its smallest increase to interest rates since March. But that was before a jolting jobs report on Friday showed U.S. employers added a third of a million more jobs than expected last month.
The shocking show of strength raised concerns about upward pressure on inflation and worries the Fed may end up keeping rates higher for longer, as it's been warning. Higher rates can drive down inflation but also hurt the economy and investment prices.
But Powell said Tuesday at the Economic Club of Washington, D.C., that the market's big moves since the jobs report have gotten it closer to in sync with the Fed's thinking. Not only did stocks fall, Wall Street raised its forecast for how high the Fed will take rates by the summer.
Investors also reduced bets that the Fed may cut rates later this year. Rate cuts can goose the economy and act like steroids for markets.
"We have a significant road ahead to get inflation down to 2%," which is the Fed's target, Powell said Tuesday. "There's been an expectation that it will go away quickly and painlessly. I don't think that's at all guaranteed."
Powell also said that if more jobs reports or inflation data come in way above expectations, the Fed may ultimately raise rates even higher than it's been saying.
After pulling its key overnight rate all the way to a range of 4.50% to 4.75%, up from virtually zero a year ago, the Fed has said it envisions a couple more increases before holding steady through the end of the year.
Treasury yields have zoomed higher recently on expectations for a firmer Fed. They held relatively steady Tuesday
The yield on the 10-year Treasury, which helps set rates for mortgages and other important loans, rose to 3.68% from 3.64% late Monday. The two-year yield, which moves more on expectations for the Fed, rose to 4.49% from 4.47% and is near its highest level since November.
Despite all the market's recent moves, stock prices are still up a healthy amount since the start of the year. The S&P 500 is up 8.5%. Much of that was due to easing worries the economy may fall into a severe recession, a scenario described in markets as a "hard landing."
"If I had to take a camp today, it would be in the soft-landing one, if only because of the strength of the labor market," said Ross Mayfield, investment strategy analyst at Baird. He said he sees a "slowdown or maybe a soft recession, but that's what I think a `soft landing' means now" for the economy.
"The problem is that with the market rally to start the year, you've got that scenario priced in almost," he said. "There are still risks to the downside."
A relatively lackluster earnings reporting season on Wall Street is also rolling on.
Carrier Global dropped 3.8% despite matching analysts' expectations for profits in the latest quarter. It also gave a forecast for revenue this upcoming year that was slightly above Wall Street's expectations. Analysts pointed to a deceleration in orders.
On the winning end was DuPont, which climbed 7.5% after reporting stronger profit for the latest quarter than analysts expected. Activision Blizzard gained 5.6% after the video-game company reported stronger revenue and profit for its latest quarter than expected.
A 4.2% move higher for Microsoft also helped lift the market. It said it's using ChatGPT-like technology in its Bing search engine.
All told, the S&P 500 rose 52.92 to 4,164.00, the Dow gained 265.67 to 34,156.69 and the Nasdaq rose 226.34 to 12,113.79.
In stock markets overseas, Sydney's S&P-ASX 200 lost 0.5% after the Reserve Bank of Australia raised its benchmark rate by 0.25 percentage points to 3.35%. It said more hikes are planned to lower inflation that is at a 33-year high of 7.8% to its target range of 2% to 3%.
In Japan, the Nikkei 225 slipped less than 0.1% after the government reported wages rose 4.8% over a year earlier in December. That was close to a three-decade high as workers press for higher pay to keep pace with inflation.
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AP Business Writers Joe McDonald and Matt Ott contributed
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