U.S. stock indexes rose sharply Thursday morning, after the Federal Reserve hiked interest rates in a bid to rein in rising inflation.
asserted
Reserve → rise → inflation
In early trading, the S&P 500 soared 1.2% while the Nasdaq Composite surged 1.6%.
asserted
Composite → soar → trading
The Dow Jones Industrial Average rose 450 points, or 0.9%.
asserted
Average → rise → ?
The Russell 2000 index, which tracks small and midsize companies, rose 1.5%.
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which → track → companies
The jump in stocks also came alongside a rally in bonds, sending their yields lower, as the price of oil declined for a second straight day.
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price → come → day
U.S. crude oil briefly fell below $100 per barrel for the first time since Sept. 11 and Brent crude fell to as low as $101 after just two days earlier hitting $109.
asserted
crude → fall → 109
There was also positive economic news in latest jobless claims report, which showed that filings for unemployment claims declined to the lowest since July.
uncertain
filings → be → July
U.S. Treasury bond yields fell as stock markets rose.
asserted
markets → fall → ?
After touching 5.02% on Wednesday, the 10-year Treasury yield declined to 4.96%.
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yield → touch → %
The 30-year yield declined to 5.31% after hitting 5.36% a day earlier.
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yield → decline → %
Bond yields around the world also eased further after the Bank of England declined to raise interest rates and canceled plans to sell a tranche of longer-dated bonds.
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Bank → ease → bonds
The move across assets appeared to be helped by a renewed confidence in the Fed and its new chairman, Kevin Warsh.
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move → appear → Fed
After Warsh’s first few speeches and statements sent bond yields soaring to multi-decade highs and confused investors, Warsh’s Wednesday press conference drew praise for its clarity.
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conference → send → clarity
“Warsh’s press conference was coherent, confident and consistently hawkish without coming across as crazily so,” wrote Evercore ISI’s vice chairman Krishna Guha.
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Guha → come → ?
In central banker speak, hawkish typically refers to an official who supports higher rates to keep inflation in check.
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who → refer → check
“The Warsh Fed defied the Trump administration and preserved its credibility by following through on earlier signals” that it would hike rates, wrote ABN-AMRO economist Rogier Quaedvlieg in a report Thursday morning.
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Quaedvlieg → defy → report
Warsh “threaded the needle very well,” wrote Northlight Asset Management chief investment officer Chris Zaccarelli.
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Zaccarelli → thread → needle
Meanwhile, oil’s decline was largely attributed to a report overnight that President Donald Trump would likely discuss the Iran war with Gulf leaders next week at the United Nations General Assembly’s high level meeting in New York.
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Trump → attribute → York
Saudi Arabia is also reportedly making progress restoring up to half of its East-West oil pipeline capacity after the key artery was shuttered following an attack on the critical energy asset.
uncertain
artery → make → asset
The pipeline could be back in service within days, Bloomberg News reported.
uncertain
News → report → days
NBC News was not able to immediately confirm the reporting.
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News → confirm → reporting
Still, oil prices remain sharply elevated since the start of the year.
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prices → remain → year
U.S. and Brent crude oil prices are both trading at more than 65% higher.
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prices → trade → ?
Retail gasoline prices climbed again Thursday by seven cents to a national average price of $4.43 per gallon.
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prices → climb → gallon
Diesel prices also continued their surge, with the AAA national average jumping eight cents to $6.39 per gallon The average price of diesel is now up 93 cents from a month ago.
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price → continue → diesel
Yet Thursday’s market optimism could be short lived.
uncertain
optimism → live → ?
Fed officials warned Wednesday that the central bank likely needs to hike rates again before the end of the year.
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bank → warn → year
They also forecasted another potential hike early next year.
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They → forecast → hike
Additionally, on Thursday evening, the Bank of Japan is widely expected to raise rates.
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Bank → expect → rates
Higher rates can often ripple across the global bond market.
asserted
rates → ripple → market
The Aporia
