Tech profits propel S&P 500, Nasdaq to record highs

More blowout profit reports from big tech companies pushed the S&P 500 to an all-time high Wednesday.

The benchmark index rose 1%, even though most of the stocks within it closed lower. Technology stocks accounted for the lion’s share of the gains, outweighing losses in health care, utilities, energy and other sectors.

The S&P 500 gained 35.11 points to 3,478.73. The Dow Jones Industrial Average rose 83.48 points, or 0.3%, to 28,331.92. The Nasdaq composite, which is heavily weighted with technology stocks, climbed 198.59 points, or 1.7%, to 11,665.06, its thirdstraight record high. Smaller companies struggled. The Russell 2000 index of smallcap stocks fell 11.02 points, or 0.7%, to 1,560.19.

The S&P 500 has notched several record highs this month, adding to its remarkable turnaround from a nearly 34% skid this spring as the pandemic ravaged the economy. While the market’s movements have remained almost relentlessly upward in recent weeks, powered largely by big technology stocks, its momentum has slowed. Recent data reports have shown a mixed picture on the economy, where activity has largely slowed after its initial rebound from its plummet into recession.

Still, the latest economic data provided more reason for investor optimism. The Commerce Department said Wednesday that orders for transportation equipment, computers and other longlasting goods jumped more in July than economists expected.

“The economy continues to show signs of recovery,” said Patrick Schaffer, global investment specialist at J.P. Morgan Private Bank. “Virus containment strategies seem more targeted and less blunt than they were in the initial phases” of the pandemic.

The market will pay close attention today as the Federal Reserve’s chairman gives a highly anticipated speech on monetary policy in an online session. Jerome Powell will be speaking as part of the Fed’s annual economic symposium, which is usually held in Jackson Hole, Wyo., where past Fed officials have made big market-moving announcements.

Many investors expect Powell to talk about inflation, as well as the importance of Congress delivering more aid for the economy after much of its last round of stimulus expired. Many investors are still assuming Congress will eventually reach a deal on such aid, but partisan disagreements have prevented one so far.

The Fed has been one of the primary reasons for the stock market’s return to a record, after it pledged to keep short-term interest rates at their record low and to continue buying bonds to support the economy.

“I think the Fed is going to continue to go all in,” said Brad McMillan, chief investment officer for Commonwealth Financial Network, noting that the central bank is also increasingly serious about wanting to boost inflation.

The yield on the 10-year Treasury note rose to 0.69% from 0.68% late Tuesday. It’s been climbing in recent weeks, up from 0.53% at the end of July, and it tends to move with investors’ expectations for the economy and inflation.

If yields move high enough, it could rattle the stock market, as higher rates can draw investors back into bonds and away from stocks. The recent ultralow rates have helped technology and other high-growth stocks in particular. But analysts say the 10-year Treasury yield would need to get closer to 1% to drive real concerns.

Technology stocks had a good day, with Adobe up 9.1%. Hewlett Packard Enterprise gained 3.6% following its own better-than-expected profit report.

Tech stocks in the S&P 500 accounted for more than 57% of the index’s gain. It continues a long-standing run on Wall Street, where investors continue to pile into companies that can deliver strong growth even if the economy is weak or quarantined.

Information for this article was contributed by Yuri Kageyama of The Associated Press.