U.S. stocks are rising Wednesday and recovering much of their sharp losses from the day before, which was Wall Street’s worst in three weeks. But several events coming up later in the day could still shake things.
Quick Read
- U.S. stocks are experiencing a rebound, with the S&P 500, Dow Jones, and Nasdaq all seeing early gains after a significant drop the previous day, marking Wall Street’s worst performance in three weeks.
- Notable movements include CrowdStrike’s 20.1% jump following stronger-than-expected quarterly profit and an optimistic profit forecast, as well as Campbell Soup’s 4.1% increase after reporting better-than-expected earnings.
- Big Tech stocks like Amazon and Meta Platforms are showing signs of stabilization after contributing to the market’s previous decline. These stocks play a significant role in the S&P 500’s performance due to their size and growth expectations.
- In the bond market, Treasury yields are slightly down in anticipation of upcoming events, including a job openings update and Fed Chair Jerome Powell’s testimony before a House committee.
- Powell’s remarks reaffirmed the possibility of a Fed rate cut this year, contingent on further evidence of inflation moving towards the 2% target.
- The Fed’s “Beige Book” release later in the day will provide additional insight into the country’s economic condition.
- Foot Locker and Nordstrom shares dropped despite positive earnings reports, with concerns over dividend resumption and future profit forecasts impacting investor sentiment.
- The 10-year Treasury yield decreased slightly, and global stock markets showed mixed responses, with Hong Kong’s Hang Seng making a notable recovery.
- Chinese officials expressed confidence in achieving their economic growth target for the year, despite acknowledging the challenge it presents.
The Associated Press has the story:
Wall Street rises to recover much of this week’s losses as big events loom
Newslooks- NEW YORK (AP) —
U.S. stocks are rising Wednesday and recovering much of their sharp losses from the day before, which was Wall Street’s worst in three weeks. But several events coming up later in the day could still shake things.
The S&P 500 was 0.6% higher in early trading, a day after sharp drops for Big Tech stocks dragged it 1% lower. The Dow Jones Industrial Average was up 198 points, or 0.5%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.9% higher.
CrowdStrike jumped 20.1% after the cybersecurity company reported stronger profit for the latest quarter than analysts expected. It also gave a forecast for upcoming profit that topped Wall Street’s estimates.
Campbell Soup climbed 4.1% after it likewise reported stronger-than-expected profit.
Amazon, Meta Platforms and several other Big Tech stocks were also stabilizing a day after pulling the market lower. These stocks have been disproportionately responsible for the S&P 500’s run to records on expectations for continued growth. That’s raised the bar for them to justify their high stock prices, and their massive sizes mean their stock movements carry much more weight on the market than anything else.
Amazon rose 0.8% a day after slumping 1.9%, and Meta gained 1.8% after losing 1.6%.
In the bond market, Treasury yields were edging lower ahead of potentially market-moving events slated for 10 a.m. Eastern time.
That’s when the latest monthly update will arrive on how many job openings U.S. employers were advertising. Economists expect it to show a slowdown into January from December, which would fit with traders’ hopes for continued but more modest growth.
Such a slowdown could help the economy thread the needle and stay out of recession while also removing upward pressure on inflation. That in turn could get the Federal Reserve to cut its main interest rate, which is sitting at its highest level since 2001 in hopes of grinding down inflation by slowing the economy. Such a move would release pressure on the financial system.
Fed Chair Jerome Powell will also begin speaking about interest rates before a House of Representatives committee in what could be the day’s headline event.
What he says could further sway expectations for when the Fed could begin cutting interest rates. Traders have already shelved earlier expectations for a cut in March, and they’re now eyeing June.
In prepared remarks for his testimony, Powell said little new. He reiterated his belief that the Fed will cut its main interest rate this year but that it needs more evidence inflation is falling toward its 2% target before acting.
Later in the day, the Federal Reserve will release its “Beige Book,” which describes how the economy is faring around the country.
On Wall Street, Foot Locker tumbled 18.1% even though it reported stronger profit for the latest quarter than analysts expected. The sneaker retailer said it’s not yet resuming its dividend as it rebuilds cash. It also gave a forecast for upcoming profit that fell short of analysts’ expectations.
Nordstrom likewise fell even though its report for the latest quarter topped forecasts. It sank 13.8% after giving a forecasted range for profit this upcoming year whose midpoint was below analysts’ estimates.
In the bond market, the yield on the 10-year Treasury slipped to 4.11% from 4.14% late Tuesday.
In stock markets abroad, indexes were mixed with mostly modest moves across Europe and Asia.
Hong Kong’s Hang Seng jumped 1.7% to trim its loss for the week. In China, top officials said they have plenty of room to attain their target for economic growth this year, though they acknowledged it’s a challenge.
