US shares stabilize following massive selloff

The Nasdaq Composite closed higher in a mixed trading session on Wednesday as investors tried to find their footing after the biggest one-day drop in more than two years.

The modest gains followed a massive sell-off for stocks on Tuesday. The Dow sank more than 1,200 points, or nearly 4%, while the S&P 500 lost 4.3%. The Nasdaq Composite dropped 5.2%. It was the biggest one-day slide for all three averages since June 2020.

The Nasdaq rose 0.74% to 11,719.68. The S&P 500 added 0.34% to close at 3,946.01. The Dow Jones Industrial Average inched up 30.12 points, or 0.10%, to 31,135.09 after being down more than 200 points at session lows.

Moderna was one of the top performers in the Nasdaq, jumping more than 6%. Tesla rose 3.6%, and Apple tacked on 1%.

The drop was sparked by August’s CPI reading for August, which showed headline inflation rising 0.1% on a monthly basis despite a drop in fuel prices. Hot inflation left questions unanswered over whether stocks could go back to their June lows or fall even further. It also spurred some fears that the Federal Reserve could hike interest rates even higher than the 75 basis points markets are pricing in.