Wall Street Soars On Back of Big Tech

Wall Street jumped on Wednesday, closing sharply higher as megacap growth stocks powered up thanks to a pause in rising interest rates, and upbeat earnings reports also encouraged investors to buy.

The benchmark 10-year US Treasury yield slipped from multi-year highs hit in the previous session, helping steady sentiment across global markets and boosting demand for growth stocks.

Meta Platforms surged, ending four sessions of deep declines that saw it lose almost a third of its value. The biggest boosts to the S&P 500 came from Nvidia and Microsoft.

Real estate was among the strongest of 11 S&P 500 sector indexes. The bond market basically is saying there’s a cap or a limit to how much the Fed is likely to raise rates, and that is very positive for stocks in general, and especially for growth stocks tend to be valued higher.

Hit by worries about rising interest, the tech-heavy Nasdaq has fallen almost 8% so far this year after gaining nearly 21% in 2021.

Unofficially, the Dow Jones Industrial Average rose 0.86% to end at 35,768.99 points, while the S&P 500 (.SPX) gained 1.45% to 4,587.21. The Nasdaq Composite climbed 2.08% to 14,490.37.

Investors will watch consumer price data on Thursday for clues on the Federal Reserve’s plans to hike interest rates. An unexpectedly strong jobs report last week raised concerns of a more aggressive move by the central bank.

Inflation is forecast at a four-decade high of 7.3%. The US economy may be nearing a slower pace of inflation, Atlanta Fed President Raphael Bostic said on Wednesday, though he added he is still leaning toward a slightly faster pace of interest rate increases this year.

Of the 316 companies in the S&P 500 that have reported earnings to date, 78% reported above analyst expectations, according to Refinitiv data. Chipotle Mexican Grill Inc surged after beating profit and sales estimates, while KFC parent Yum Brands Inc rose after sales beat estimates.

Enphase Energy Inc jumped on upbeat results, lifting other solar stocks, like SunPower Corp and SolarEdge Technologies Inc. CVS Health Corp slipped after its earnings forecast for 2022 fell short of Wall Street expectations.