Global markets rebounded as Japan’s Nikkei 225 surged 10.2%, recovering much of its losses from the previous day, which marked its worst drop since 1987, AP News reports.
This lifted US stocks, with the S&P 500 rising 1%, breaking a three-day losing streak. The Dow Jones climbed 294 points (0.8%), and the Nasdaq gained 1%. The recovery was fueled by better-than-expected profit reports from companies like Kenvue, Uber, and Caterpillar. Kenvue’s stock jumped 14.7%, Uber’s by 10.9%, and Caterpillar’s by 3% after strong earnings. The rebound followed concerns that the Federal Reserve’s high interest rates to curb inflation were hurting the economy.
The market volatility was partly due to hedge funds unwinding trades involving borrowing yen cheaply and investing elsewhere, exacerbated by the Bank of Japan raising interest rates. This unwinding led to a global market sell-off, but the yen stabilized, calming markets.
