After moving sharply higher early in the session, stocks continued to turn in a strong performance throughout the trading day on Wednesday. The major averages all moved to the upside after ending Tuesday’s trading mixed, with the tech-heavy Nasdaq posting a particularly strong gain.
The Nasdaq soared 451.98 points or 2.6 percent to 17,599.40, more than offsetting the 1.3 percent slump seen during yesterday’s session. The S&P 500 (SPI:SP500) also jumped 85.86 points or 1.6 percent to 5,522.30, while the Dow rose 99.46 points or 0.2 percent to 40,842.79.
The early rally on Wall Street partly reflected a positive reaction to some of the latest corporate earnings news from companies like Advanced Micro Devices (NASDAQ:AMD).
Shares of AMD surged by 4.4 percent after the chipmaker reported second quarter results that exceeded analyst estimates on both the top and bottom lines.
Coffee giant Starbucks (NASDAQ:SBUX) also saw significant strength after reporting fiscal third quarter earnings in line with estimates and maintaining its full-year guidance.
Shares of DuPont (NYSE:DD) also moved sharply higher after the chemical giant reported better than expected second quarter results.
On the other hand, shares of Microsoft (NASDAQ:MSFT) moved to the downside after the tech giant reported quarterly earnings and revenue that beat expectations but disappointing cloud computing results.
Stocks continued to see significant strength in afternoon trading following the Federal Reserve’s monetary policy announcement.
While the Fed left interest rates unchanged, as widely expected, minor changes to the accompanying statement may hint at future rate cuts.
Notably, the Fed said it is attentive to the risks to “both sides of its dual mandate” after previously saying it was “highly attentive to inflation risks.”
Fed Chair Jerome Powell said during his post-meeting press conference that a rate cut in September would be “on the table” if economic data continues on its current bath.
The central bank’s next monetary policy meeting is scheduled for September 17-18, when investors widely expected the Fed to begin lowering interest rates.
According to CME Group’s FedWatch Tool, there is currently a 93.5 percent chance the Fed will lower rates by a quarter point in September.
Sector News
Semiconductor stocks showed a substantial rebound on the heels of the upbeat AMD earnings, with the Philadelphia Semiconductor Index soaring by 7.0 percent after ending the previous session at its lowest closing level in over two months.
Considerable strength was also visible among computer hardware stocks, as reflected by the 3.4 percent surge by the NYSE Arca Computer Hardware Index.
Gold stocks also rallied amid a sharp increase by the price of the precious metal, driving the NYSE Arca Gold Bugs Index up by 2.8 percent.
Telecom ,networking and oil service stocks are also saw significant strength, while some weakness emerged among airline and banking stocks.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Wednesday. Japan’s Nikkei 225 Index shot up by 1.5 percent, while China’s Shanghai Composite Index surged by 2.1 percent.
The major European markets also moved to the upside on the day. While the U.K.’s FTSE 100 Index jumped by 1.1 percent, the French CAC 40 Index advanced by 0.8 percent and the German DAX Index climbed by 0.5 percent.
In the bond market, treasuries extended the upward move seen over the past several sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell 3.4 basis points to a four-month closing low of 4.109 percent.
Looking Ahead
A slew of U.S. economic data is scheduled to be released on Thursday, including reports on weekly jobless claims, labor productivity and costs, manufacturing activity and construction spending.
SOURCE: RTTNEWS