Wall Street rebounds following slide as Big Tech takes reins again

NEW YORK — Jumps for Big Tech on Thursday helped U.S. stock indexes claw back much of their slide from the day before.

The S&P 500 rose 38.42 points, or 0.7%, to 5,199.06 and recovered most of its prior loss, caused by worries that interest rates may stay high for a while. The Nasdaq composite charged up by 271.84, or 1.7%, to a record 16,442.20. The Dow Jones Industrial Average, which has less of an emphasis on tech, was the laggard. It slipped by 2.43 points, or less than 0.1%, to 38,459.08.

Apple was the strongest force pushing the market upward, and it climbed 4.3% to trim its loss for the year so far. Nvidia was close behind, as it keeps riding a frenzy around artificial-intelligence technology. The chip company rose 4.1% to take its gain for the year to 83%. Amazon added 1.7% and set a record after topping its prior high set in 2021.

It’s a return to last year’s form, when a handful of Big Tech stocks was responsible for the majority of the market’s gains. This year, the gains had been spreading out. That is, until worries about stubbornly high inflation sent a chill through financial markets.

In the bond market, which has been driving much of Wall Street’s action, Treasury yields held relatively steady following a mixed batch of data on inflation and the U.S. economy.

When or whether the Federal Reserve will deliver the cuts to interest rates that traders are craving has been one of the main questions dominating Wall Street. After coming into the year forecasting at least six cuts to rates, traders have since drastically scaled back their expectations. A string of hotter - than expected -reports on inflation and the economy has raised fears that last year’s progress on inflation has stalled. Many traders are now expecting just two cuts in 2024, with some discussing the possibility of zero.

A report on Thursday morning showed inflation at the wholesale level was a touch lower last month than economists expected. That’s encouraging, but the data also showed underlying trends for inflation were closer to forecasts or just above.

The update doesn’t offset Wednesday’s disappointingly high report on inflation at the U.S. consumer level, “but it may ease investor nerves, at least in the short term,” said Chris Larkin, managing director, trading and investing, at E-Trade from Morgan Stanley.

The Federal Reserve has been holding its main interest rate at the highest level since 2001 in hopes of pushing down enough on the economy and investments prices to get high inflation under control. The fear is that rates held too high for too long because of stubbornly high inflation can cause a recession.