Currency traders work at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, May 3, 2022.
That will make it more costly to borrow — for a car, a home, a credit card purchase and may weaken the economy. It also would draw investments out of stocks into other assets as their yields rise. Ultra-low interest rates helped drive stocks to unprecedented highs during the pandemic and now that process is being reversed.
“For the session ahead, traders will be working on positioning ahead of the FOMC and watching the RBA Meeting, where much firmer-than-expected . . . consumer price index data in Australia may have pitched the scales towards a rate hike," Anderson Alves of ActivTrades said in a commentary.Hong Kong's Hang Seng rose 0.1% to 21,114.25 and the Kospi in South Korea rose 0.2% to 2,693.38.
Smaller company stocks also reversed course after spending much of the day in the red. The Russell 2000 index rose 1% to 1,882.91. Just over half of the stocks in the S&P 500 closed higher, with the technology and communication sectors driving much of the advance. Chipmaker Nvidia and Facebook's parent company, Meta Platforms, each rose 5.3%.
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