Stocks moved sharply higher over the course of the trading day on Wednesday, with the major averages all moving to the upside after ending Tuesday’s session mixed. The Nasdaq led the charge amid a rally by technology stocks.
The major averages pulled back off their best levels going into the close but remained firmly positive. The Nasdaq surged 215.16 points or 1.6 percent to 13,721.03, the S&P 500 jumped 48.46 points or 1.1 percent to 4,436.01 and the Dow climbed 184.15 points or 0.5 percent to 34,472.98.
The spike by the Nasdaq came as tech stocks rallied ahead of earnings news from Nvidia (NVDA), with the chipmaker releasing its fiscal second quarter results after the close of trading.
The results from Nvidia, a leader in the AI space, could have a significant impact on the outlook for the technology sector. Shares of Nvidia shot up by 3.2 percent on the day.
“When the trading week is over, the key for stocks might not be Jackson Hole, but Nvidia’s outlook for the AI trade,” said Edward Moya, senior market analyst at OANDA.
He added, “Wall Street has already priced in higher for longer, but they are unsure if Nvidia will be able to bolster confidence for the mega-cap tech trade.”
A steep drop by bond yields also generated some buying interest, as the ten-year yield pulled back further off highest levels in well over fifteen years.
The strength on Wall Street was also partly attributed to some disappointing economic data, which helped ease recent concerns about the outlook for interest rates.
S&P Global released data showing a slowdown in the pace of growth in service sector activity in the month of August as well as a contraction in manufacturing activity during the month.
Meanwhile, the Commerce Department released a separate report showing new home sales rebounded by much more than expected in the month of July.
The Commerce Department said new home sales spiked by 4.4 percent to an annual rate of 714,000 in July after tumbling by 2.8 percent to a revised rate of 684,000 in June.
Economists had expected new home sales to jump by 1.2 percent to a rate of 705,000 from the 697,000 originally reported for the previous month.
With the much bigger than expected increase, new home sales reached their highest annual rate since hitting 773,000 in February 2022, RTTNews cited.
Sector News
Gold stocks showed a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 3.3 percent.
The rally by gold stocks came amid a sharp increase by the price of the precious metal, with gold for December delivery jumping $22.10 to $1,948.10 an ounce.
Semiconductor, computer hardware and software stocks have also moved significantly higher, contributing to the surge by the tech-heavy Nasdaq.
Housing stocks also saw considerable strength following the upbeat new home sales data, resulting in a 1.6 percent gain by the Philadelphia Housing Sector Index.
Most of the other major sectors also moved to the upside on the day, with notable strength visible among commercial real estate, brokerage and airline stocks.
Looking Ahead
Trading on Thursday is likely to be driven by reaction to Nvidia’s results, while reports on durable goods orders and initial jobless claims may also attract attention.
