US stocks rose Wednesday as investors considered another wave of corporate earnings reports and a key reading on the services sector hit a three-month high.
the S&P 500 rose 1.1%, recouping losses after falling Tuesday. The Dow Jones Industrial Average added 1.1%. The Nasdaq Composite gained 2.1%.
Stocks had come under renewed pressure in recent days from geopolitical tensions as US House Speaker
met with Taiwan’s president despite warnings from China. Meanwhile, Federal Reserve officials said the central bank is likely to continue raising interest rates at coming meetings, dampening hopes in markets that slowing economic growth could mean a change in policy.
So far Ms. Pelosi’s trip hasn’t had any tangible ramifications, and some better-than-expected earnings reports amide low liquidity in August are lifting sentiment, investors say.
“Markets are taking a bit of a breather to assess what’s going on globally,” said Olivier Marciot, global macro portfolio manager at Unigestion. “There is still a lot of inflation, central banks are keeping that hawkish rhetoric and we get some geopolitics on top of that.”
But earnings have been pretty good, in terms of beating expectations, he added.
The yield on the benchmark 10-year Treasury note rose to 2.764% from 2.740% Tuesday. Weak economic data have weighed on yields in recent days, according to Michael Hewson, markets analyst at CMC Markets. There are “raised concerns that the US economy could well be slowing sharply,” he said.
Despite those worries, the US services sector continued to expand in July, according to a report from the Institute for Supply Management. The ISM’s index of conditions for businesses like restaurants, hotels and retailers hit a three-month high in July.
The broader problem for investors is that whether or not the economy is technically in recession, inflation and the pressure it puts on the Fed to raise rates is resulting in an environment for investors that is fundamentally different from anything they have seen over the past several decades portfolio, said Eaton Vance manager Aaron Dunn. That won’t end soon, he said.
There has been a bounce back recently in some of the more beaten-up stocks, he said, but those hoping the growth trade returns may be disappointed. “Equities returns are going to be a grind,” he added.
shares jumped 9.6% after hedge fund Elliott Management confirmed it has a $2 billion stake in the payments company. Starbucks rose 3.4% after it said demand is still strong and raising prices partially offset higher labor costs.
rose 15% after it posted earnings above analysts’ estimates and said it would begin a new $3 billion share repurchase program.
declined 2.7% after it said it swung back to profit but its outlook disappointed investors. online dating group
tumbled 18% after posting results that missed estimates and said the CEO of Tinder is leaving the firm.
fell 3.6% after it reported a drop in profit and issued guidance for the current period that came below Wall Street’s expectations.
are scheduled to report earnings after markets close.
Oil prices fell after an OPEC+ meeting where a committee suggested a smaller-than-expected production increase, according to delegates. US crude fell 3.2% to $91.40.
Overseas, the pan-continental Stoxx Europe 600 ticked up 0.5%. British-listed cybersecurity firm
soared 44% after a UK regulator said it has provisionally cleared
$7.3 billion acquisition of the company. french
rose 3.1% after reporting a narrower loss than analysts expected, despite its exit from Russia.
In Asia, major benchmarks were mixed. The Shanghai Composite Index ticked down 0.7%, extending losses after it closed down 2.3% on Tuesday. Hong Kong’s Hang Seng added 0.4% and Japan’s Nikkei 225 rose 0.5%.
Write to Anna Hirtenstein at email@example.com and Paul Vigna at Paul.Vigna@wsj.com
We want to hear from you
By submitting your response to this questionnaire, you consent to Dow Jones processing your special categories of personal information and are indicating that your answers may be investigated and published by The Wall Street Journal and you are willing to be contacted by a Journal reporter to discuss your answers further. In an article on this subject, the Journal will not attribute your answers to you by name unless a reporter contacts you and you provide that consent.
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8