NEW YORK — Stocks rose on Wall Street Wednesday as falling bond yields and lower oil prices helped ease pressure on the market.
The S&P 500 climbed 0.6 per cent. The Dow Jones Industrial Average added 486 points, or 0.9 per cent, as of 11:58 a.m. Eastern. The Nasdaq composite rose 0.7 per cent.
Technology stocks were gaining ground after two days of losses that weighed on the market. That helped push indexes higher as gains broadened out to other sectors, including retailers and industrial companies.
Apple rose 1.7 per cent, Amazon jumped 3.3 per cent and Caterpillar rose 1.8 per cent.
Nvidia rose 0.5 per cent following a 4.1 per cent drop on Tuesday. Micron Technology, which reports its latest results later Wednesday, fell 0.8 per cent following its 13.2 per cent plunge on Tuesday.
Google’s parent company Alphabet rose 1.2 per cent. The company is replacing Verizon in the Dow on Monday. Alphabet will become the fifth Magnificent 7 company to join the index. The others are Apple, Amazon, Microsoft and Nvidia.
Big Tech companies, especially those focused on artificial intelligence, have pricey values that give them more sway over the market’s broader direction. That was the case on Tuesday when sharp losses for a few valuable tech companies pulled the market lower.
Oil prices continued slipping as the U.S. and Iran negotiate a possible end to their war. Brent crude, the international standard, fell 3.6 per cent to US$74 a barrel. It has been trading below $80 in recent days but is still above the roughly $70 per barrel it was trading at in late February before the war began. U.S. crude prices fell 3.9 per cent to $70.37 a barrel.
Oil companies lagged the market. Exxon Mobil fell 2.8 per cent and Chevron lost 2.9 per cent.
Some of the bigger winners on Wall Street included homebuilders following approval of legislation beneficial to the industry. KB Home surged 16.8 per cent and D.R. Horton jumped 7.3 per cent.
Treasury yields mostly fell, removing more pressure from stocks. The yield on the 10-year Treasury fell to 4.40 per cent from 4.50 per cent late Tuesday. The yield on the 2-year Treasury eased to 4.15 per cent from 4.16 per cent.
Treasury yields are still elevated from earlier in the year, especially the 2-year Treasury, which more closely tracks anticipated action from the U.S. Federal Reserve. The central bank has signaled that it is considering raising its benchmark interest rate by the end of the year. Wall Street is forecasting at least one hike to interest rates by December, according to data from CME Group.
The Fed is worried about stubborn inflation, which had been rising throughout the year as tariffs raised the costs for a wide range of goods. A shock to energy prices because of the U.S. war with Iran worsened inflation. Gasoline prices surged and shipping costs rose. The impact is expected to linger even as oil and gasoline prices fall.
The central bank will get a fresh update on inflation Thursday, when its preferred measure for prices is released. Economists expect the Personal Consumption Expenditures price index, or PCE, to show that prices rose 4.1 per cent in May. That would be the highest level in three years.
“Thursday’s PCE is set to take on greater importance for markets, especially since Federal Reserve Chair (Kevin) Warsh was emphatic in last week’s meeting about the central bank’s desire to achieve price stability,” wrote Rick Gardner, chief investment officer at RGA Investments, in a research note.
Gold prices fell 2.9 per cent, and at one point slipped below $4,000 an ounce. Gold was above $5,000 an ounce earlier in the year. The precious metal is often seen as a barometer of the appetite for risk among investors, with more buying at times of increased anxiety and more selling as anxiety eases.
Markets were mixed in Europe and Asia.
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AP Business Writers Chan Ho-him and Matt Ott contributed to this report.
By Damian J. Troise
