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Stocks Rally as Odds of Fed Going Bigger Come Down: Markets Wrap

  • Fed heads toward 75 basis-point hike as officials wary of more
  • US long-term inflation outlook falls to lowest level in year
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US Is Already in a 'Mild Recession,' Says SiegelSource: Bloomberg
Updated on

The stock market snapped back at the end of a dizzying week as traders reduced their wagers on a bigger Federal Reserve hike in July, while parsing a raft of Wall Street earnings and hoping for signs of capitulation that could set the stage for a more sustained recovery.

American equities halted a five-day slide, with the expiration of about $1.9 trillion in options. Banks led gains after Citigroup Inc.’s blowout results. Swaps are pricing in nearly 75 basis points of Fed tightening this month -- down from a full-point bet earlier in the week -- but still an aggressive boost that leaves investors wondering about the odds of a recession. The dollar and bond yields fell. Oil rose, while ending below $100 a barrel.