Hopes of more official stimulus for the economy and the easing of a bond market rally drove a broad rise in stocks on Friday, as a bruising week for markets drew to a close.
Wall Street’s three main indexes are down at least 1.5 percent since last Friday, on track to rack up their third consecutive week of losses, as investors worried about the risk of recession and US-China trade tensions.
China’s state planner said overnight that it would roll out a plan to boost disposable income this year and in 2020 to spur consumption as the economy slows.
Investors are also expecting further interest rate cuts from the Federal Reserve and moves by the European Central Bank next month to fight softening growth.
“We haven’t seen any major headlines on trade war today and that is giving the market some relief. The move back up on yields is also releasing the pressure on equity markets,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.