Wall Street finishes up as Fed soothes inflation fears

NEW YORK — Shares on Wall Street ended higher on Wednesday, as a selloff in technology-related stocks eased and a rotation into cyclical shares continued after Federal Reserve Chair Jerome Powell’s comments calmed inflation worries.

The Nasdaq index, which traded as much as 1.3% lower earlier in the session, regained its footing by early afternoon and closed up. The Dow hit a record high earlier in the session.

GameStop Corp. stock, which was at the center of volatile moves in late January by shares talked about on a Reddit forum, more than doubled with no obvious catalyst. Volume was more than two times the 10-day moving average.

Mr. Powell told lawmakers on Wednesday it may take more than three years to reach the central bank’s inflation goals, a sign the Fed plans leave interest rates unchanged for a long time to come.

“What’s driving the stock market is the fiscal stimulus, the dovish Fed, the real strong, strong earnings that we’re seeing, as well as the fact that we’re going to have a third vaccine,” said Richard Saperstein, chief investment officer at Treasury Partners.

The US Food and Drug Administration (FDA) said on Wednesday Johnson & Johnson’s one-dose coronavirus disease 2019 (COVID-19) vaccine appeared safe and effective in trials, paving the way for its approval for emergency use as soon as this week.

Johnson & Johnson rose 1.3% following the news.

The Dow Jones Industrial Average closed up 424.51 points or 1.35% to 31,961.86, the S&P 500 gained 44.06 points or 1.14% to 3,925.43 and the Nasdaq Composite added 132.77 points or 0.99% to 13,597.97. All three main indexes were on track to post strong monthly gains, with the Dow and the S&P 500 set for their best month since November.

Investors have focused on rising US yields and their potential impact on growth stocks. Mr. Saperstein said higher yields could pressure stocks but would not derail the upward trend.

“I don’t believe that the 10-year yield going from 1% to 1.5% is going to alter the calculus of owning large technology stocks,” said Mr. Saperstein.

Value-oriented stocks have enjoyed a bit of a bounce recently, and the S&P 500 Value index rose for a fourth straight day.

The S&P 500 financial sector hit an all-time peak, while other cyclical stocks including industrials, energy and materials also rose.

The S&P 500 Growth index, which includes most of the high-flying technologyrelated stocks, has come under pressure in the last few days due to valuation concerns, elevated Treasury yields and an investment shift into more economy-sensitive parts of the market.

Microsoft Corp., Amazon.com, Inc. and Apple, Inc. were down 0.4% to 1.1%, while Facebook, Netflix, Inc. and Alphabet, Inc. reversed earlier declines. —