Wall Street's main indexes rallied on Wednesday, with high-growth stocks gaining as a recent rally in Treasury yields paused, while investors took comfort from upbeat earnings reports and signs of easing tensions in Ukraine.
The benchmark 10-year US Treasury yield slipped from multi-year highs hit in the previous session, helping steady sentiment across global markets.
All of the 11 major S&P 500 sectors advanced in early afternoon trading, with six of them rising more than 1% each.
Mega-cap names such as Apple Inc, Tesla Inc , Google-owner Alphabet Inc and Microsoft Corp rose between 0.3% and 1.1%. Facebook parent Meta Platforms Inc gained 2.9% and was set to break its four-day slump.
"It is partially due to the 10-year (yield) coming down, it is still at a high level but the tick down is giving some relief to the tech-related names," said Lindsey Bell, chief investment strategist at Ally Invest in Charlotte.
"The tech sector had been beaten up coming into February and we have seen a bit of bounce since end of January."
Growth and technology names have been among the worst hit this year on rate hike fears as their value rests heavily on future earnings, which are discounted more deeply when rates go up.
The tech-heavy Nasdaq has fallen 8% so far this year after gaining nearly 21.4% in 2021.
At 12:20 p.m. ET, the Dow Jones Industrial Average was up 252.85 points, or 0.71%, at 35,715.63, the S&P 500 was up 50.27 points, or 1.11%, at 4,571.81, and the Nasdaq Composite was up 199.38 points, or 1.40%, at 14,393.83.
Investors are awaiting consumer prices data on Thursday for clues on the Federal Reserve's plans to hike interest rates after an unexpectedly strong jobs report last week raised concerns of a more aggressive move by the central bank.
Inflation is forecast at a four-decade high of 7.3%.
However, Bell said, "There are signs that it could peak and we could be easing from very high levels of inflation, and not only that, we are going to start seeing a higher growth rate."
Atlanta Fed President Raphael Bostic echoed this sentiment of being at the "cusp" of inflation, and said he is still leaning towards a slightly faster pace of rate hikes this year.
News about easing of tensions between the West and Russia over Ukraine helped lift investor sentiment, along with upbeat earnings.
Of the 316 companies in the S&P 500 that have reported earnings to date, 77.8% reported above analyst expectations, according to Refinitiv data.
Chipotle Mexican Grill Inc climbed 9.2% after beating profit and sales estimates, while KFC-parent Yum Brands Inc rose 2.9% after its sales beat estimates.
Enphase Energy Inc jumped 9.3% on upbeat results, lifting other solar stocks like SunPower Corp and SolarEdge Technologies Inc nearly 7% each.
CVS Health Corp slipped 5.1% after its earnings forecast for 2022 fell short of Wall Street expectations.
Advancing issues outnumbered decliners by a 3.33-to-1 ratio on the NYSE and by a 2.63-to-1 ratio on the Nasdaq.
The S&P index recorded 39 new 52-week highs and no new low, while the Nasdaq recorded 44 new highs and 35 new lows.
Comments
Comments are closed for this article.