US stocks rebound on Fed reassurance

US stocks climbed on Tuesday on policy reassurance from a top Fed official following losses in the previous three sessions.

The Dow Jones Industrial Average picked up 140.48 points, or 0.52 per cent, to 27,288.18. The S&P 500 moved up 34.51 points, or 1.05 per cent, to 3,315.57. The Nasdaq Composite Index advanced 184.84 points, or 1.71 per cent, to 10,963.64, Xinhua reported.

Eight of the 11 sectors under S&P 500 made gains led by consumer discretionary, communication services and technology sectors. Meanwhile, energy, financials and health sectors fell on investors’ wariness of sector-specific headwinds.

US-listed Chinese companies most traded higher, with seven of the top 10 stocks by weight in the S&P US Listed China 50 index ending the day on an upbeat note.

Fed Chairman Jerome Powell on Tuesday said the Fed would do more to bolster the economy for as long as it takes if needed when he sat at a hearing held by the Congress.

Accumulated Covid-19 deaths as of Tuesday topped 200,000 in the United States though the averaged daily death toll stayed below 1,000 in the last few weeks, according to Johns Hopkins University.

The sell-off on Monday was driven by fears of renewed lockdowns, partisan US politics, rising US-China tensions and pressures facing the banking sector, according to a research note by UBS AG.

Tensions will not subside ahead of the US general election in early November, reducing the chance of new stimulus within the upcoming two months, UBS Global Wealth Management’s Chief Investment Officer Mark Haefele said in the note.

Haefele added that volatility in the equity market would persist over the balance of the year and the path to normalcy is likely to be bumpy.

The annual rate of existing home sales edged up to 6 million units in August, slightly higher than that in July and market expectations, according to data issued by National Association of Realtors on Tuesday.

However, existing home sales only recorded 2.4 per cent of month-on-month expansion following a jump of 24.7 per cent in July, which indicates the slowdown of economic recovery.