Tech companies led a broad rally for stocks on Wall Street on Thursday, reversing most of the major indices’ losses from a day earlier and extending the market’s recent string of uneven trades.
The S&P 500 rose 1.4%, more than offsetting its decline a day earlier. More than 85% of stocks in the benchmark rose. The Dow Jones Industrial Average gained 1%, while the tech-heavy Nasdaq composite climbed 1.9%.
The latest gains took the S&P 500 out of red for the week. The Nasdaq is also on pace for a weekly gain, while the Dow Jones is down slightly for the week after the indices have alternated between gains and losses over the past few days.
“There’s a bit of a tussle right now…and investors are just looking for direction,” said Darrell Cronk, chief investment officer for wealth and investment management at Wells Fargo.
The S&P 500 rose 63.92 points to 4,520.16, while the Dow gained 349.44 points to 34,707.94. The Nasdaq climbed from 269.23 to 14,191.84.
Stocks of small companies also rallied. The Russell 2000 rose 23.24 points, or 1.1%, to 2,075.44.
Tech stocks accounted for by far the largest share of S&P 500 gains, followed closely by communications companies. Many Big Tech companies have outsized values that tend to sway the larger market in both directions. Chipmaker Nvidia jumped 9.8% for the biggest gain in the S&P 500. Facebook parent Meta rose 2.9%.
Stock indices have had their ups and downs after rebounding strongly last week. Investors are trying to gauge how the economy and corporate earnings will be affected this year as the Federal Reserve prepares to raise interest rates to rein in soaring inflation.
Russia’s invasion of Ukraine has added more uncertainty to the global economic outlook, driving up prices for energy and other commodities. Fluctuating energy prices have been one of the push and pull factors for the entire stock market.
Crude oil prices slipped on Thursday after surging a day earlier. Benchmark US crude oil fell 2.3% to settle at US$112.34 a barrel. The barrel of Brent, the international standard, fell 2.1% to settle at US$119.03. Overall, global oil prices have risen more than 50% in 2022 due to persistently rising inflation and concerns about limited supply due to Russia’s invasion of Ukraine. .
Investors around the world had their eyes on NATO and European leaders, who held a summit on Thursday. G-7 countries are restricting the Russian Central Bank’s use of gold in transactions and the United States has announced new sanctions against Russian individuals and entities.
Dozens of nations, including the United States and much of Europe, say they are united in seeking to “drastically” cut Russian oil and gas imports.
Sanctions have so far gutted the value of the ruble and caused the Russian stock exchange to shut down nearly a month ago. The exchange reopened on Thursday under heavy restrictions to prevent the kind of sell-off that has occurred in anticipation of crippling financial and economic sanctions from Western countries.
Wall Street is watching the latest developments in the dispute as it tries to determine how much it could worsen inflation and potentially dampen global economic growth. Businesses and consumers have faced rising costs of materials and goods, prompting central banks to raise interest rates to lessen the impact of inflation.
Bond yields rose overall as the market braces for higher interest rates. The 10-year Treasury yield rose to 2.36% from 2.31% on Wednesday night.
“Markets are clearly signaling a deceleration in GDP growth and earnings growth,” Cronk said.
Investors received an encouraging update on the continued recovery in the labor market. The number of Americans applying for unemployment benefits last week fell to its lowest level in 52 years. The upbeat report adds to data earlier this month that showed employers added 678,000 jobs in February, the highest monthly total since July.