Dollar jumps amidst global stocks turmoil, but Dow Jones closes higher

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NEW YORK, New York – U.S. stocks finished higher in choppy trading on Monday, buoyed by a rally in tech names.

Earlier in the day shares in China plunged with the Shanghai Composite losing 5.13 percent. Hong Kong’s Hang Seng shed 3.73 percent. Falls were also prominent in London and the UK while the U.S. dollar rallied sharply.

Despite the turmoil elsewhere, in the U.S., the Dow Jones Industrial Average rose 238.06 points, or 0.70 percent, to close at 34,049.46. The S&P 500 added 24.34 points, or 0.57 percent, to 4,296.12. The Nasdaq Composite Index increased 165.56 points, or 1.29 percent, to 13,004.85.

Earlier in the day, all the three major averages dropped with the Dow Jones 30-stock index down 488 points at its session lows.

Six of the 11 primary S&P 500 sectors ended in the green, with communication services and technology up 1.53 percent and 1.44 percent, respectively, outpacing the rest. Energy tumbled 3.34 percent, the worst-performing group.

Despite Monday’s rally, analysts warned that market volatility is likely to continue amid growing concerns about the pace of monetary tightening.

Federal Reserve Chair Jerome Powell affirmed last week the U.S. central bank’s determination to bring down inflation, indicating a 50-basis-point hike was “on the table” at the May policy meeting.

“With the Fed talking tough about persistent inflation, fears about a Fed-induced recession will remain elevated until the data offers clear support for moderating inflation,” Mark Haefele, chief investment officer at UBS Global Wealth Management, said Monday in a note.

For the week ending Friday, the Dow and the S&P 500 slid 1.9 percent and 2.8 percent, respectively, while the tech-heavy Nasdaq shed 3.8 percent.

Buyers swarmed forex markets Monday bidding up the greenback. The euro dropped like a stone to 1.0713 by the New York close. The British pound was sharply lower at 1.2743. The Japanese yen was little changed at 128.13. The Swiss franc depreciated to 0.9589.

The Canadian dollar was lower at 1.2734. The Australian dollar was unwanted at 0.7182. The New Zealand dollar dived to 0.6621.

In Paris, France, the CAC 40 dropped 2.01 percent. The German Dax was down 1.54 percent. In London, the FTSE 100 lost 1.88 percent.

Japan’s Nikkei 225 declined 1.90 percent. In New Zealand, the S&P/NZX 50 fell 0.38 percent. South Korea’s Kospi Composite let go 1.76 percent.