As Trump blasts 'crazy' Fed
Investors pull back from interest rate rise rout
Close: Equity markets staged a recovery, following a two-day rout, easing worries among investors.
The Nasdaq was the standout performer on Wall Street, jumping 2.3% to 7,496.89 as investors decided tech stocks still had some attraction. Amazon added 4%, while Netflix surged 5.7
The broader S&P 500 managed a more modest 1.4% rise to 2,767.13, while the Dow Jones was up 1.15% to 25,339.99.
However the FTSE 100 closed below 7,000, ending the week 11.02 points lower at 6,995.91. Tensions also eased in Asia’s main stock markets overnight.
Hong Kong shares rose in morning trade, and the Hang Seng Index was up 1.6%. In Tokyo, the main Nikkei-225 index began the day more than 1% lower but bounced back to trade almost flat. The Shanghai Composite meanwhile has gained half a per cent.
Stocks fell amid worries over rising bond yields, slowing global growth and worries that the US may hike interest rates for a fourth time this year.
Talk of rate rises among Fed policymakers triggered the sell off in Treasuries last week and sent long-term yields to their highest in seven years.
The surge made stocks look less attractive compared to bonds while also threatening to curb economic activity and profits.
US President Donald Trump has regularly broken with tradition in the US by commenting on the Federal Reserve’s policy.
Mr Trump told reporters that “the Fed is making a mistake. The Fed has gone crazy”.
AJ Bell analyst Russ Mould, said: “Whether the US Federal Reserve is, as President Trump argues, ‘crazy’ to be lifting interest rates the prospect of further hikes certainly seems to be a catalyst for a lot of the market worry.
“The moves in US and Asian indices look alarming but the latest bout of market weakness is worth keeping in some perspective. In February the FTSE dived 3.4% at the open and a decade ago at the height of the crisis the index endured three 7%-plus falls in little more than a week.
“A bear market is often defined as being a 20% fall over a two-month period. Using that yardstick, the FTSE is a long way short of that definition, down nearly 8% since August.”