U.S. markets recover most of day’s sharp losses
NEW YORK — U.S. stocks rose on Wednesday to recover much of their sharp losses from a day before, triggered by worries that high interest rates may stick around for months longer than hoped.
The S&P 500 climbed 47.45 points, or 1%, to 5,000.62 and clawed back more than twothirds of its loss from Tuesday. A hotter-than-expected report on inflation forced investors to delay forecasts for when the Federal Reserve may begin cutting interest rates, potentially into the summer. Expectations for such cuts are a big reason stocks rallied to records recently.
The Dow Jones Industrial Average gained 151.52 points, or 0.4%, to 38,424.27 a day after after dropping 524 points for its worst loss in nearly 11 months. The Nasdaq composite jumped 203.55, or 1.3%, to 15,859.15.
The smallest stocks, which took the hardest hit from worries about higher interest rates on Tuesday, bounced back more than the rest of the market. The Russell 2000 index leaped 2.4%.
Helping to keep things steadier on Wall Street was a calmer bond market. Treasury yields eased after shooting upward a day earlier on expectations the Fed would keep rates high for longer. The central bank has already raised its main interest rate to the highest level since 2001 in hopes of slowing the overall economy just enough to grind high inflation down to its target.
The yield on the 10-year Treasury fell from 4.32% to 4.25% late Tuesday. It’s still well above its 3.85% level at the start of this month.
Critics have been arguing that stock prices may have run too far, too fast in their rally since October. A pullback could be healthy if it take some of the “froth” out of the market, according to JJ Kinahan, chief executive officer of IG North America.
Kinahan said he found it interesting that big recent winners like Nvidia and other chipmakers finished Tuesday well off their lows for the day.
That makes him think the day’s drop “was more about taking some profits than it was panic selling” by investors.
Shares of Nvidia, which has been riding a mania around artificial-intelligence technology, rose 2.5% Wednesday and was the single strongest force pushing up the S&P 500 index.
DaVita jumped 8.6% for one of the S&P 500’s larger gains after the health care company reported stronger profit and revenue for the latest quarter than analysts expected.
Most companies in the S&P 500 have been topping analysts’ forecasts for the last three months of 2023. Hopes for stronger growth in 2024 from a solid economy have been another reason the S&P 500 has set 10 records already this year.
Shares of Uber Technologies rose 14.7% after its board authorized a program to buy back up to $7 billion of its stock. Investors tend to like such programs because they send cash directly to shareholders and can boost pershare profits.
Robinhood Markets shares gained 13% after it reported a profit for the latest quarter, when analysts were expecting a loss. The stock and crypto trading platform also said its total net revenue rose 24%, more than analysts expected.
On the losing end, share sof Akamai Technologies fell 8.2% after it reported mixed results. Its profit for the latest quarter topped analysts’ forecasts, but its revenue fell short.
Online vacation rental booker Airbnb slipped 1.7% after it reported losing $349 million in the fourth quarter due to an income tax settlement with Italy. Analysts had been expecting a profit.
The company forecast first-quarter revenue that would meet or beat Wall Street expectations, however, Airbnb said the pace of bookings growth is likely to “moderate” from the fourth quarter into the first.