Wall Street rose on Wednesday, buoyed by a rally in interest-rate-sensitive growth stocks as investors digested mixed quarterly results and inflation data.
On the day, the index S&P 500 gained 50.27 points1.14%, to 4., 47.72 points, while the Nasdaq advanced 270.16 points, 2.02%, to 13,641.73. The Industry Average Dow Jones rose 358.30 points1.05%, to 34,578.66 units.
Falling US Treasury yields helped the tech-heavy Nasdaq lead all three major US stock indices higher and semiconductors outperformed the broader market.
“Bond yields may have gotten ahead of themselves and are falling today,” said David Carter, managing director of Wealthspire Advisors. “This helps almost all equities, but especially growth areas like technology.”
JPMorgan Chase & Co. started its first-quarter earnings season inauspiciously, reporting a 42% drop in quarterly profit. Lackluster results from America’s largest lender sent its shares lower.
However, Delta Air Lines delivered more upbeat results, beating consensus expectations and forecasting a return to profit in the current quarter due to “historically high” demand. Its shares rose, as did the broader S&P 1500 airline index.
“It’s great that demand is so strong,” Carter added. “However, it drives inflation higher, which will force the Fed to keep raising rates, which will translate into a weaker stock market.”
Strong demand also propelled the Labor Department’s Producer Price Index to an 11.2% year-over-year growth rate, the hottest annual reading since the Labor Department began tracking annual data in 2010.
“It’s obvious that the Fed is now singing the same song, and that further tightening is coming,” Carter said. “However, much of this is discounted and expected.”