US shares jump on robust earnings, strong US data

US stock indexes rose on Wednesday on strong results from PayPal and CVS Health, with investors awaiting services activity data for clues on the health of the economy struggling with soaring inflation and tightening financial conditions.

Shares of PayPal Holdings jumped 11.6% after the fintech company raised its annual profit guidance and said activist investor Elliott Management has an over $2 billion stake.

CVS Health Corp (CVS.N) gained 4.7% as the largest U.S. pharmacy chain raised its annual profit forecast after posting strong quarterly results. A largely positive second-quarter earnings season helped markets bounce back in a year roiled by the Ukraine war, fears of a looming recession and an aggressive rise in borrowing costs.

The benchmark S&P 500 index and tech-heavy Nasdaq are up 13.3% and 18.2%, respectively, from the lows hit in mid-June. The Dow Jones Industrial Average rose 336 points, or 1.04%. gained 1.25%, boosted by rising tech stocks.

Better-than-expected economic data lifted stocks. The ISM non-manufacturing purchasing managers index, released Wednesday, showed a surprise rebound. So, traders cheered better-than-expected economic data that slowed down the idea that a recession is inevitable. Earnings season continued, giving investors hope that the market can recover.