Wall Street rally sets up the ASX for more gains; Bitcoin rises

Stocks rose broadly on Wall Street on Tuesday in New York, clawing back some of the ground they lost in their worst weekly drop since the beginning of the pandemic.

In late trade, the S&P 500 is 2.7 per cent higher, the Dow Jones has added 2.5 per cent and the Nasdaq is up 2.9 per cent in the first trading day of the week on Wall Street. The Australian sharemarket is set to open higher, with futures at 5.04am AEST pointing to a rise of 43 points, or 0.7 per cent, at the open. On Tuesday, the ASX stopped its losing streak with a 1.4 per cent jump.

Wall Street has kicked off the week with strong gains.Credit:AP

Technology stocks had some of the strongest gains. Apple rose 3.3 per cent and Microsoft rose 2.3 per cent.

Retailers, health care companies and banks also made solid gains. Kellogg rose 2.5 per cent after the maker of Frosted Flakes and Rice Krispies said it would split into three companies. Spirit Airlines jumped 7.9 per cent after JetBlue sweetened its buyout offer for the budget airline.

European markets ended mostly higher, while Asian markets closed mixed overnight. The yield on the 10-year Treasury rose to 3.30 per cent from 3.23 per cent late Friday. Markets were closed Monday for the observation of Juneteenth.

Bitcoin continued to climb after slumping below $US18,000 on the weekend. At 5.24am AEST, it is 5.7 per cent higher at $US21,166.82

Roughly 90 per cent of stocks within the benchmark S&P 500 index gained ground. The index remains stuck in a slump, though, along with every other major index, and is still down about 21 per cent from the record high it set in January.

Stocks have been generally sliding as investors adjust to higher interest rates that the Federal Reserve and other central banks are increasingly doling out. The aggressive rate hikes are part of a plan to temper record-high inflation, but investors are worried that the Fed risks slowing economic growth too much and bringing on a recession.

The worries over inflation and interest rates have been worsened by a spike in energy prices following Russia’s invasion of Ukraine. The price of U.S. crude oil rose 1 per cent to settle at $110.65 per barrel Tuesday. It’s up about 52 per cent for the year. That has taken a bigger bite out of people’s wallets at the gas pump and is prompting a slowdown in spending elsewhere.

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