US stocks surged sharply in morning trading on Wall Street
Tuesday and gained ground they lost in past weeks. The S&P 500 rose 99.69
points or 2.71% as of 10:21 am Eastern time. The benchmark index has been
surging since touching its lowest point of the year on Friday to close out a
September slump.

The Dow Jones Industrial Average rose 744 points or 2.5% to
30,236. The Nasdaq rose 344.58 points or 3.19% to 11,160.02. Small company
stocks also made significant gains. The Russell 2000 rose 3.3%.

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The broad gains come amid hopes that central banks might
ease up on their aggressive rate hikes aimed at controlling the hottest
inflation in forty years. Reserve Bank of Australia raised key interest rates
by less than expected 25 basis points on Tuesday.

European and Asian markets also witnessed solid gains.
Australia’s market rallied by 3.8%.

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Treasury yields continued to fall from their multiyear
highs, which has helped relieve some of the pressure on stocks. The yield on
the 10-year Treasury, which helps decide rates for mortgages and other loans,
fell to 3.59% from 3.65% late Monday. It got as high as 4% last week after
starting the year at just 1.51%.

Investors are closely watching central banks as they raise
interest rates to make borrowing more difficult and slow economic growth to try
to control inflation. Central banks are expected to eventually ease off their
aggressive rate hikes and the move by Australia’s central bank is a hopeful
sign for some.

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Wall Street is concerned that the rate hikes, especially
the increases from the Federal Reserve, could go too far in slowing growth and
send economies into a recession. The Fed has already hiked its key overnight
interest rate to a range of 3% to 3.25%, up from virtually zero as recently as
March.

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Economy growth is already slowing worldwide and the US
economy shrunk during the first two quarters of the year, which is considered
an informal signal of a recession. The economy still has several strong
segments, including employment. Wall Street will get a more detailed outlook of
the employment situation in the US when the government releases its monthly
jobs report for September on Friday.