World stocks extend week-long rebound after slew of US data
economic data helped soothe fears of a recession in the world's largest economy.
On Wall Street, stocks extended their biggest weekly percentage gains of the year. The Dow Jones Industrial Average finished up about 0.25% — bringing its weekly gain to 2.7% — while the S&P 500 and Nasdaq Composite both increased 0.2%; they were up about 3.7% and 5% on the week, respectively.
MSCI's main world stock index rose 0.5%, adding to its recovery from market turmoil last week generated by U.S. recession fears and foreign exchange gyrations. The pan-European STOXX 600 index rose 0.3% on the day, still hovering at its two-week high and logging its best week since May 6, up 2.4%.
The VIX U.S. stock volatility index, broadly considered the market's fear gauge, sat at benign levels of about 15 after hitting a four-year high of 65 early last week.
The sharp turnaround in market sentiment came after a batch of U.S. data this week showed inflation was moderating and retail spending was robust.
That has helped the market narrative move away from recession concerns, sparked by a weak U.S. jobs report in early August, to confidence the economy can keep growing. Softer inflation data has also reinforced expectations of an interest rate cut by the U.S. Federal Reserve in September.
On Friday, a survey showed that U.S. consumer sentiment rose in August, driven by developments in the U.S. presidential race, while inflation expectations remained unchanged over the next year and beyond.
Scott Wren, a Wells Fargo Investment Institute
