On welcome up day, S&P 500 gains 1.8%, Dow 1.4%

Stock indexes on Wall Street closed solidly higher Wednesday, placing the market on pace to break a threeweek losing streak.

The S& P 500 rose 1.8% on Wednesday, its biggest single-day gain in four weeks, with roughly 95% of the stocks in the benchmark index closing higher.

The Dow Jones Industrial Average rose 1.4%, and the tech-heavy Nasdaq climbed 2.1%. Smaller company stocks outgained the broader market, driving the Russell 2000 index 2.2% higher.

The indexes are now in the green for the week, a welcome respite for traders after a slump in recent weeks that erased much of the market’s gains from July and early August rallies.

Wall Street watchers cautioned that the market is likely to see more volatility ahead of the two-day Federal Reserve interest rate policy meeting scheduled to start Sept. 21.

“It’s good that there’s an up day, but I would caution anyone not to be too optimistic right now,” said Randy Frederick, managing director of trading and derivatives at Charles Schwab. “You don’t have a whole lot of reason for that.”

Stocks have been mostly losing ground in recent weeks after the Fed indicated it will not let up on raising interest rates to bring down the highest inflation in four decades.

Wall Street’s focus remains on inflation and the Fed’s attempt to rein it in with high interest rates. The central bank has already raised rates four times this year, and markets expect it to deliver another large increase of three-quarters of a percentage point this month.

The central bank has been clear about its determination to continue raising rates until it feels that inflation is leveling off or cooling. In June, Fed officials projected that the benchmark rate will reach a range of 3.25% to 3.5% by the end of the year, adding roughly another half a percentage point in 2023.

“We are in this for as long as it takes to get inflation down,” Fed Vice Chairman Lael Brainard said at a banking industry conference on Wednesday. “Our resolve is firm, our goals are clear, and our tools are up to the task.”

Investors have been reviewing economic data to gauge whether price increases on everything from food to clothing and gas are easing. They are also closely listening for any clues about potential changes in policy from Fed officials.

Traders clawed back some of their recent losses with Wednesday’s rally, which pushed the S&P 500 up 71.68 points to 3,979.87. The Dow rose 435.98 points to 31,581.28, and the Nasdaq gained 246.99 points to 11,791.90.

The Russell 2000 climbed 39.68 points to 1,832.

Technology stocks and retailers made solid gains. Intuit Inc. rose 3.9%. Target Corp. rose 4.4% after announcing that it is dropping the mandatory retirement age for its CEO position, allowing CEO Brian Cornell to stay on for three more years.

United Airlines Holdings Inc. rose 5.5% after raising its revenue forecast following a busy summer travel season. The encouraging update helped several competitors take flight. American Airlines Group Inc. rose 5.1% and Delta Air Lines Inc. added 3.3%.

Energy stocks fell broadly as U.S. crude oil prices slid 5.7%. Chevron Corp. fell 1.3%.

Bond yields fell. The yield on the 10-year Treasury, which influences interest rates on mortgages and other loans, fell to 3.27% from 3.34% late Tuesday. The 2-year Treasury yield, which tends to track expectations for Fed action, fell to 3.45% from 3.51%.

Markets in Europe closed mostly higher, while those in Asia ended mostly lower.