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(Reuters) – Wall Street rallied on Wednesday, with megacap growth stocks powering higher thanks to a pause in rising interest rates, and upbeat earnings reports also encouraged investors to buy.
The benchmark 10-year U.S. Treasury yield slipped from multi-year highs hit in the previous session, helping steady sentiment across global markets and boosting demand for growth stocks.
Meta Platforms jumped about 5%, on track to end four sessions of deep declines that saw it lose almost a third of its value. The biggest boost to the S&P 500 came from Nvidia (NASDAQ:NVDA) jumped over 5% and Microsoft (NASDAQ:MSFT) added 1.7%.
All of the 11 major S&P 500 sector indexes gained, with six rising more than 1%.
“The bond market basically is saying there’s a cap or a limit to how much the Fed is likely to raise rates, and that is very positive for stocks in general, and especially for growth stocks tend to be valued higher,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
Hit by worries about rising interest, the tech-heavy Nasdaq has fallen almost 8% so far this year after gaining nearly 21% in 2021.
The Dow Jones Industrial Average was up 0.88% at 35,773.63 points, while the S&P 500 gained 1.40% to 4,584.77.
The Nasdaq Composite added 1.86% to 14,458.06.
Investors are awaiting consumer prices data on Thursday for new clues on the Federal Reserve’s plans to hike interest rates. An unexpectedly strong jobs report last week raised concerns of a more aggressive move by the central bank.
Inflation is forecast at a four-decade high of 7.3%.
The U.S. economy may be nearing a slower pace of inflation, Atlanta Fed President Raphael Bostic said on Wednesday, though he added he is still leaning towards a slightly faster pace of interest rate increases this year.
Of the 316 companies in the S&P 500 that have reported earnings to date, 78% reported above analyst expectations, according to Refinitiv data.
Chipotle Mexican Grill Inc (NYSE:CMG) surged 10% after beating profit and sales estimates, while KFC parent Yum Brands Inc rose 2.5% after its sales beat estimates.
Enphase Energy (NASDAQ:ENPH) Inc jumped more than 11% on upbeat results, lifting other solar stocks like SunPower (NASDAQ:SPWR) Corp and SolarEdge Technologies Inc (O:SEDG) over 5% each.
CVS Health Corp (NYSE:CVS) slipped 5.4% after its earnings forecast for 2022 fell short of Wall Street expectations.
Advancing issues outnumbered declining ones on the NYSE by a 3.38-to-1 ratio; on Nasdaq, a 2.57-to-1 ratio favored advancers.
The S&P 500 posted 39 new 52-week highs and no new lows; the Nasdaq Composite recorded 48 new highs and 42 new lows.
