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Spokane, Washington  Est. May 19, 1883

Dow soars more than 800 points as Wall Street ends week on high note

By Yiwen Lue Washington Post

Stocks swelled Friday, lifting the Dow more than 800 points and giving Wall Street a badly needed win after weeks of tumult.

The S&P 500 soared 3.1% to snap a three-week losing streak, while the tech-heavy Nasdaq surged 3.3%.

The Dow Jones industrial average spiked 826 points, or 2.7%.

The turnaround comes after the Federal Reserve has moved aggressively to raise interest rates and teed up further increases, signaling the central bank is serious about bringing down surging inflation that is weighing on businesses and consumers.

“Even though the market has started to recover, the concerns that caused the bear market are still with us, such as inflation, an aggressive Federal Reserve, high oil prices and geopolitical tensions,” Zach Stein, chief investment officer in Carbon Collective, said in a commentary Friday.

Oil prices rose Friday as supply continued to tighten. Brent crude, the international benchmark, jumped more than 2.5% and traded at $112 per barrel.

West Texas Intermediate crude, the main U.S. benchmark, climbed nearly 3% to $107 per barrel.

Still, that’s a significant pullback since last week, when both were hovering near $120.

“Oil prices typically decline during recessions and the oil market is pricing in rising recession risk,” Stein said.

Pump prices also fell, with the national average settling at $4.93 a gallon on Friday, according to AAA. Last week, the average breached $5 for the first time.

This week’s relief came despite growing pessimism about the state of the economy, particularly soaring prices and rising interest rates.

In his two days of congressional testimony, Fed Chair Jerome H. Powell reiterated the central bank’s commitment to curbing soaring inflation with aggressive monetary policy, even in the face of a possible recession.

Inflation continued to be of top concern to consumers, as prices of essential goods like gas continued to rise.

A University of Michigan survey found that the consumer sentiment index fell to 50 in June, compared with May’s level of 58.4 and 85.5 a year ago.

Rising inflation eroded living standards for consumers even when they expected a steady income flow. Many expressed concerns over deteriorating business conditions and overall economic uncertainty.

As a result, they shifted away from services such as restaurants and tourism.

“As higher prices become harder to avoid, consumers may feel they have no choice but to adjust their spending patterns, whether through substitution of goods or forgoing purchases altogether,” wrote Joanne Hsu, director of the surveys.

“The speed and intensity at which these adjustments occur will be critical for the trajectory of the economy,”

Unemployment also exceeded economists’ expectations. Initial jobless claims reached 229,000 last week per Department of Labor’s data released Thursday, 4,000 more than the consensus estimate, according to Charles Schwab’s derivative trading manager Robert Abraham.