By DAMIAN J. TROISE
AP Business Writer
NEW YORK (AP) — Stocks rose on Wall Street Wednesday, lifting major indexes into the green for the week as investors remain focused on stubbornly hot inflation and a potential recession.
The S&P 500 rose 1.5% as of 10:58 a.m. Eastern. The Dow Jones Industrial Average rose 529 points, or 1.6%, to 33,379 and the Nasdaq rose 1.7%.
Nike surged 13.4% after reporting results that trounced analysts’ estimates. FedEx rose 4.5% after reporting strong earnings. Energy stocks gained ground as U.S. crude oil prices rose 2.2%. Hess gained 2.2%
Treasury yields fell. The yield on the 10-year Treasury, which influences mortgage rates, slipped to 3.66% from 3.69% late Tuesday.
European markets were higher and Asian markets closed mixed overnight.
Investors are grappling with expectations that interest rates will remain high for longer than they had expected as the Federal Reserve continues fighting stubbornly hot inflation. The federal funds rate stands at a range of 4.25% to 4.5%, the highest level in 15 years. Fed policymakers forecast that the central bank’s rate will reach a range of 5% to 5.25% by the end of 2023. Their forecast doesn’t call for a rate cut before 2024.
Wall Street is worried that central banks will go too far in raising interest rates and ultimately slow the economy so much that it slips into a recession. That has left investors closely focused on economic updates to get a better idea of how businesses and consumers are dealing with inflation.
Sales of previously occupied homes fell more than economists expected in November. The housing market has been a strong area of the economy, but has been tempered by rising mortgage rates. That has made an already tight housing market even more difficult for prospective homebuyers.
Consumer confidence is surprisingly strong, despite inflation squeezing wallets. The Conference Board reported Wednesday that its consumer confidence index rose to 108.3 in December, up from 101.4 in November. It’s a sharp rebound, pushing the index to its highest level since April. Last month’s figure was the lowest since July.
Consumer spending, along with the employment market, has been another strong area of the economy that has helped protect it from slipping into a recession.
The government will release a closely watched monthly snapshot of consumer spending on Friday, the personal consumption expenditure price index for November. The report is monitored by the Fed as a barometer of inflation, which has been easing, but at a relatively slow pace. Economists expect the report to show that inflation continued cooling in November.
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Elaine Kurtenbach and Matt Ott contributed to this report.
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