NEW YORK (AP) — Big technology stocks led a rally for U.S. indexes, increasing optimism for imminent interest rate cuts. The S&P 500 surged 1.6% on Wednesday, marking its best day in five months. The Dow Jones Industrial Average also rose by 0.2%, while the Nasdaq composite soared 2.6%. Treasury yields eased in the bond market following the Federal Reserve’s hint at potential interest rate cuts in September, prompting widespread gains. Chip stocks, particularly Advanced Micro Devices, played a key role in the market’s surge after posting better-than-expected profits. Oil prices also climbed, contributing to rising stock indexes globally.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
NEW YORK (AP) — Big technology stocks are rebounding, driving a significant rally for U.S. indexes on Wall Street. The S&P 500 was up 2% in afternoon trading, on pace for its strongest day in five months. The Dow Jones Industrial Average gained 427 points, or 1%, while the Nasdaq composite surged by 3%.
Oil prices jumped around 4% after concerns over the death of Hamas’ political leader raised worries about crude flow in the Middle East. In the bond market, Treasury yields decreased following the Federal Reserve’s decision to maintain its main interest rate at a two-decade high, hinting at potential future rate cuts.
Weaker-than-expected U.S. economic reports released in the morning reinforced hopes that inflation is slowing enough to prompt a rate cut in September. Fed Chair Jerome Powell indicated that policy makers are considering a rate cut, though the exact timing remains uncertain.
On Wall Street, Advanced Micro Devices saw a 5% rally after reporting strong profits and revenue for the latest quarter. This positive performance also boosted Nvidia by 13.9% after a previous decline.
The performance of Big Tech stocks is closely monitored as they have significant influence on the S&P 500. These stocks, collectively known as the “Magnificent Seven,” have been pivotal in driving the market to record highs. Concerns over their high valuations had dampened performance in recent weeks, until the recent surge.
Stronger-than-expected earnings from companies outside the Big Tech sector, such as Match Group, DuPont, and Boeing, also contributed to the market’s positive momentum on Wednesday.
The 10-year Treasury yield eased to 4.11% as expectations for future rate cuts by the Federal Reserve increased. In the oil market, prices rose following concerns over escalating conflicts in the Middle East.
Stock markets in Japan, China, and Hong Kong rallied on positive economic data, while European indexes also saw gains.
AP Business Writer Matt Ott contributed.
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