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What’s driving markets

Stocks closed higher on Thursday in a volatile session with Dow swinging more than 460 points, following hawkish news from the world’s two largest central banks.

During a discussion hosted by the Cato Institute, Federal Reserve Chairman Jerome Powell said the Fed remained strongly committed to fighting inflation, and that it wouldn’t be deterred by politics or other distractions.

“I can also assure you that we never take into consideration external political considerations,” Powell said.

Meanwhile, the European Central Bank hiked interest rates by 75 basis points, and signaled that more jumbo-sized rate hikes would likely follow.

Gene Goldman, chief investment officer at Cetera Investment Management, said Powell’s comments largely reiterated the hawkish tone from his Jackson Hole speech late last month.

“The comments from Powell are nothing groundbreaking. There was nothing really new. He continued to stress the importance of tightening policy to fight inflation,” Goldman said.

He added that he expects markets will remain rangebound until investors get the next update on inflation in August, which is due out Tuesday, September 13.

Powell’s comments followed similarly hawkish remarks from Fed Vice-Chair Lael Brainard, who said Wednesday that higher interest rates would be necessary “for some time,” as well as a Wall Street Journal report hinting at another 75 basis point rate hike from the Fed at its meeting later this month.

Chicago Fed President Charles Evans said Thursday that he is comfortable with the central bank raising its benchmark interest rate to a peak close to 4% by the end of the year.

“I guess I don’t have great heartburn of accelerating that towards the end of this year or January, but still, I’d like to see how the data plays out,” Evans said in a discussion with reporters following a speech at College of DuPage in suburban Chicago.

Brian Mulberry, client portfolio manager at Zacks Investment Management, said the Fed is paying attention to get all price levels to come down at once, rather than having a “rolling type of a recession”.

“I think 75 basis points is pretty much a certainty in a couple of weeks time…,” Mulberry told 江湖电竞最新版比赛(江湖电竞投注app网站) via phone. “I don’t think it (CPI) will change the Feds thinking at all. So for two weeks away from that next meeting, I think that impact is pretty much baked in, but what happens after the September meeting might now start being in more of a discussion in terms of market pricing and market valuation.”

On the U.S. economic data front, weekly jobless claims data showed layoffs in the U.S. remained near record lows as the number of Americans applying for unemployment benefits fell to its lowest level in three-and-a-half months.

Elsewhere in North America, the Bank of Canada delivered another 75 basis-point rate hike on Wednesday.

In Europe, the euro rallied briefly after the ECB rate hike, before turning back lower as focus shifted back toward expectations for another 75 basis point hike from the Federal Reserve in September.

The pound GBPUSD, +0.73% also declined against the dollar following the ECB hike and U.K. Prime Minister Liz Truss unveiling details of a £150 billion ($173 billion) support package for households and business struggling with surging power prices.

The New York Stock Exchange and the Nasdaq honored the life and legacy of Queen Elizabeth II, the UK’s monarch for the past 70 years, with a moment of silence held at 3 p.m. Eastern. The Queen  died peacefully  at her Balmoral home in Scotland on Thursday, the Royal Family said in a statement. She was 96.

Companies in focus

• GameStop Corp. GME, +11.96%  shares rose 4.2% after the video games retailer announced a partnership with digital asset exchange FTX to “introduce more GameStop customers to FTX’s community and its marketplaces for digital assets”.
• Snap Inc. SNAP, +0.96% shares jumped 10% after Verge reported its CEO Evan Spiegel broke down plans to reach $6 billion in revenue and 450 million users in a leaked internal memo.
• Rivian Automotive RIVN, +1.82% shares popped 8.6% after the electric-vehicle startup and Mercedes announced they are planning a joint venture to produce electric vans in a factory in Poland, Hungary or Romania within the next few years.

— Jamie Chisholm contributed to this article.

Hear from Carl Icahn at the Best New Ideas in Money Festival on Sept. 21 and Sept. 22 in New York. The legendary trader will reveal his view on this year’s wild market ride.