The Dow Jones Industrial Average rose 268.91 points, or 0.8%, to 33,973.01, the S&P 500 rose 50.36 points, or 1.28%, to 3,969.61 and the Nasdaq Composite rose 189.04 points, or 1.76%, to 10,931.67.
US stocks ended higher on Wednesday, with the S&P 500 and Nasdaq each gaining more than 1%, as investors were optimistic ahead of an inflation report that could give the Federal Reserve some time to dial back on its aggressive interest rate hikes. Was.
The much-anticipated report, due on Thursday, is expected by economists provided by Reuters to show US consumer prices rose 6.5% year-on-year in December, down from a 7.1% increase in November.
Among sectors, real estate and consumer discretionary were the day's strongest performers, while Microsoft, Amazon.com and other mega-cap growth names provided the biggest boosts to the S&P 500.
The benchmark index is still up till 2023 after falling sharply last year. Expectations that the Fed could soon return to its aggressive tightening after raising the federal funds rate seven times in 2022 have boosted markets in recent sessions, even as comments from some Fed officials supported the view. Has said that the central bank needs to be cautious about it. Raising rates to fight inflation.
"Investors are speculating that we are closer to breakeven than at any other point last year," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. The market will welcome it, he added.
In addition, "any time you have a down year, it's not surprising to have a number of reversals at the beginning of the new year," he added.
The Dow Jones Industrial Average rose 268.91 points, or 0.8%, to 33,973.01, the S&P 500 rose 50.36 points, or 1.28%, to 3,969.61 and the Nasdaq Composite rose 189.04 points, or 1.76%, to 10,931.67.
Money market participants see a 75% chance that the Fed will raise the benchmark rate by 25 basis points in February.
This week also marks the start of fourth-quarter earnings season for S&P 500 companies, with overall S&P 500 earnings expected to decline year-over-year, according to IBES data from Refinitiv.
The biggest US banks, which kick off the season later this week, are expected to report lower quarterly earnings as recession risks mount due to monetary policy tightening.
A source familiar with the matter said Goldman Sachs began laying off employees on Wednesday as part of a wider drive to cut costs. Shares of Goldman Sachs closed up 2%.
Retailer Bed Bath & Beyond Inc wiped out recent gains sharply, up 68.6%, while some investors speculated it could be a potential takeover target.
Volume on US exchanges stood at 11.42 billion shares compared to an average of 11 billion for the entire session in the last 20 trading days.
Forward issues declined in a 3.78-to-1 ratio on the NYSE; On the Nasdaq, the 2.25-to-1 ratio was in favor of the advancers.
The S&P 500 posted 11 new 52-week highs and 1 new low; The Nasdaq Composite recorded 98 new highs and 20 new lows. (Reporting by Carolyn Valetkevich; Additional reporting by Shubham Batra and Amrita Khandekar in Bengaluru; Editing by Shaunak Dasgupta and Grant McCool)
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