Share prices in the US and European equity markets rose on Tuesday, but the value of the US dollar fell in hopes that the US Federal Reserve System (FRS) could slow down by raising interest rates.
The FRS and other central banks around the world have drastically raised interest rates to curb rising inflation, but tighter monetary policy has raised fears that it could push national economies into recession.
These concerns have contributed to a sharp decline in stock prices in recent weeks, especially after the FRS announced it would continue to raise interest rates this year and possibly early next year, aiming for inflation.
Weak US industrial production data on Monday reinforced hopes that central banks will be able to slow interest rate hikes, so stock prices rose Monday and continued their gains on Tuesday. Tuesday’s hike was also supported by the fact that the Reserve Bank of Australia raised interest rates by 0.25 percentage points, half the expected increase.
Oil prices continued to rise on news that OPEC and its partners are considering major production cuts to stem a price slump fueled by concerns about falling demand for crude.
The Dow Jones Industrial Average was up 2.8% to 30,316.32 on Tuesday, the Standard & Poor’s 500 was up 3.1% to 3,790.93 and the Nasdaq Composite was up 3.3% to 11,176.41 points .
London’s FTSE 100 was up 2.6% to 7,086.46 on Tuesday, Frankfurt’s DAX 30 was up 3.8% to 12,670.48, and Paris’s CAC 40 was 4.2% to 6,039.0, 69 points.
WTI crude oil rose 3.5% to $ 86.52 a barrel in e-commerce on the New York Stock Exchange on Tuesday. The price of “Brent” crude on the London Stock Exchange rose 3.4% to $ 91.80 a barrel.
The euro rose from $ 0.9826 to $ 0.9992 per euro on Tuesday, the British pound rose from $ 1.1323 to $ 1.1477 per pound on Tuesday, and the dollar against the Japanese yen fell 144.55 at 144.09 yen per dollar. The euro rose against the British pound from 86.77 to 87.03 pence per euro.
