Following a turbulent day on Wall Street, U.S. stocks are showing signs of recovery on Wednesday, supported by strong profit reports. The S&P 500, which had fallen 1.4% on Tuesday, was up 0.5% in early trading. The Dow Jones Industrial Average also rose by 0.2%, recovering from its worst loss in nearly 11 months.
Investors were initially rattled by a higher-than-expected inflation report, which raised concerns about the Federal Reserve potentially delaying interest rate cuts. However, the market seems to be stabilizing, with the Nasdaq composite up 0.7% as of 9:35 a.m. Eastern time.
Small-cap stocks, which were hit the hardest by fears of higher interest rates, rebounded strongly, with the Russell 2000 index jumping 1.4%.
The bond market, which had experienced a sharp rise in yields on Tuesday, also calmed down, with the yield on the 10-year Treasury edging down to 4.29%.
Several companies reported strong profits, contributing to the market’s recovery. DaVita, a health care company, saw its stock price surge by 9.2% after reporting better-than-expected earnings. Lyft shares soared by 30.7% in off-hours trading following a typo in its earnings report, although the company later clarified the error.
Uber Technologies also saw a significant increase in its stock price after announcing a $7 billion stock buyback program. Robinhood Markets and Akamai Technologies reported mixed results, with Robinhood seeing a 14% jump in its stock price after reporting a profit, while Akamai’s stock dropped 4.2% despite beating profit forecasts.
In international markets, London’s FTSE 100 rose 0.7% on the back of a positive inflation report, while Hong Kong’s Hang Seng index gained 0.8% after reopening following a holiday. However, stocks fell in Japan and South Korea.
Overall, the stock market appears to be recovering from Tuesday’s sharp decline, supported by strong earnings reports and calmer market conditions.
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