Stocks end higher as bargain hunting reignites
Investors eye Iran tensions
Wall Street advanced on Wednesday, notching a partial rebound from a three-day losing streak as investors searched for deals among stocks and sectors that might have been oversold amid recent risk-off moves.
All three major U.S. stock indexes gained ground, with the small-cap Russell 2000 outperforming its larger-cap peers.
On the sector level, airlines, gold and silver miners and regional banks were the frontrunners, while software and services, seen as potential victims of AI disruption, underperformed on the day.
The Philadelphia SE Semiconductor Index, which has powered much of the stock market’s gains so far this year but has lost nearly one-fourth of its value since late June, was on the rise, with chipmaker Broadcom expected to deliver second-quarter results after the bell.
“The war is continuing longer than anyone hoped, and when it ends, energy will cool and inflation won’t be as much of an issue,” said Lauren Cassidy, chief investment officer at Founders 100 ETF in Dallas. “At the same time, we just had a record earnings season, with wonderful fundamentals being driven by the accelerating adoption of AI.”
“AI adoption is still in the very early innings and it’s just now accelerating,” Cassidy added. “We could see exponential growth from here.”
Nvidia, the chipmaker at the forefront of the AI wave, ended higher, as did peers Micron and Qualcomm , among others.
According to preliminary data, the S&P 500 gained 35.35 points, or 0.46%, to end at 7,666.82 points, while the Nasdaq Composite gained 120.07 points, or 0.46%, to 26,219.85. The Dow Jones Industrial Average rose 299.37 points, or 0.56%, to 53,066.25.
Hardware firm Dell surged after raising its annual profit and revenue forecast.
Jack Daniel’s maker Brown-Forman rose following its quarterly profit beat.
Uber Technologies gained after the rideshare app announced it will lay off about 10% of its staff.
Keeping gains in check, the market-shaking global bond selloff continued, fueled by fears over inflation and mushrooming government debt, and compounded by escalating tensions in the Middle East, which have put upward pressure on energy prices.
The United States and Iran ramped up their attacks in the biggest exchange of airstrikes since July, dousing hopes of a return to the negotiating table and raising the likelihood that protracted hostilities could result in systemic inflation and force central bank leaders to raise borrowing costs.
In economics, payrolls processor ADP reported fewer-than-expected private sector job adds in August, while new orders for core capital goods were downwardly revised, signalling a potential softening in U.S. corporate spending plans.
International trade, second-quarter labor costs/productivity, and services PMI are among the economic reports on Thursday’s docket.
Reuters, Globe staff