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Stocks rise as Wall Street strives for a comeback from this year’s steep losses

Stock rose on Thursday, as the market tried to recover some of the steep losses suffered in 2022, even as Wall Street continued to weigh recession risks.

The Dow Jones Industrial Average was up 130 points, or 0.4%. The S&P 500 traded 0.5% higher, while the Nasdaq Composite rose 0.9%.

The major averages came into Thursday’s session posting strong gains for the week. The S&P 500 and the Dow are up more than 2% in that time, while the Nasdaq has risen about 3%.

To be sure, stocks closed slightly lower on Wednesday as investors weighed the likelihood of a recession.

“The bounce would certainly be suggestive of any kind of temporary reversal that comes along with very oversold conditions,” said Todd Jones, chief investment officer at Gratus Capital.

“For us, to think that this would be a more sustained move, we’d have to certainly see an improvement not only in some of the economic data, but I think more specifically, an improvement in inflation.”

Federal Reserve Chair Jerome Powell is set to speak on monetary policy for a second day Thursday with congressional lawmakers. On Wednesday, Powell said the central bank is “strongly committed” to bringing down inflation. He also noted that a recession is a “possibility,” a fear that has continued to weigh on Wall Street.

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UBS is the latest investment bank this week to raise its odds of a recession to 69%, citing lackluster data last week in housing, industrial production and capital goods.

“We are now watching out for any further negative follow-through or whether we simply hit a local peak and some growth momentum in the hard data resumes,” UBS said in a Thursday note.

Citigroup increased its odds of a recession to 50%, citing a slide in consumer demand that could make it more difficult for the Federal Reserve to achieve a soft landing.

Goldman Sachs said the probability of a downturn is “higher and more front-loaded” than it was previously. In a Monday note, the firm raised its bet of a U.S. recession to 30%, up from 15%, over the next year. It increased those odds to 48%, up from 35%, over the next two years.

On Thursday, the Labor Department said U.S. weekly jobless claims fell 2,000 to a seasonally adjusted 229,000 for the week ended June 18, though the labor market remains tight.


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