Stocks rise against backdrop of Fed comments, China COVID surge

US stocks moved higher in an uneventful, pre-Thanksgiving trading session Tuesday after starting the week on a downbeat.

The S&P 500 (^GSPC) rose 1%, while the Dow Jones Industrial Average (^DJI) jumped 300 points, or about 0.9%. The tech-heavy Nasdaq Composite (^IXIC) added 0.8%.

Cleveland Federal Reserve Bank President Loretta Mester said Tuesday that restoring price stability remains a top priority for herself and other members of the Federal Open Market Committee (FOMC), which set the monetary policy.

“We are committed to using our tools to put inflation on a sustainable downward trajectory of 2%,” he said, at an event hosted by his bank.

Mester’s counterpart in St. Louis, Fed President James Bullard, is scheduled to speak later on Tuesday.

The talks followed comments from San Francisco Federal Reserve Bank President Mary Daly Monday, who said officials could raise the U.S. central bank’s key policy rate more. of 5% if inflation does not slow down. Daly also noted that writing off a 75-basis-point hike in December is “premature,” and “nothing is off the table.”

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In commodity markets, oil pared losses on Monday after falling to January lows on fears that new lockdowns in China and a reported increase in output by Saudia Arabia and OPEC could weigh on in need. Energy Minister Prince Abdulaziz bin Salman has since played down hopes of an increase in production, helping to lift oil from declines. West Texas Intermediate (WTI) crude futures rose to $81 per barrel after hitting $75 per barrel on Monday.

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A pandemic prevention worker wearing a protective suit stands outside an apartment compound under lockdown as outbreaks of the coronavirus disease (COVID-19) continue in Beijing, China, November 12, 2022. REUTERS /Thomas Peter

A pandemic prevention worker wearing a protective suit stands outside an apartment compound under lockdown as outbreaks of the coronavirus disease (COVID-19) continue in Beijing, China, November 12, 2022. REUTERS /Thomas Peter

On the corporate side, shares of Zoom Video Communications (ZM) fell nearly 8% after the video-conferencing platform cut its annual profit outlook and anticipated further challenges caused by declining demand for online meetings.

A sharp rise in COVID cases across China has triggered a wave of new restrictions for the world’s largest economy just weeks after investors cheered an end to aggressive curbs. country lock.

“The specter of COVID still looms over China’s economy, threatening to trigger a new downturn for supply chains and demand for goods,” said Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown. said in a note on Tuesday.

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The S&P 500 started the holiday-shortened Thanksgiving week lower than in previous years. According to data from Bespoke Investment Group, the Monday of Thanksgiving week historically saw the index trade slightly lower, with a decrease of 0.01%. In years when the index has declined 10% year-to-date or more, such as 2022, the performance is more positive, with an average of 0.37% gain.

Alexandra Semenova is a reporter for Yahoo Finance. Follow him on Twitter @alexandraandnyc

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