US stocks rose on Wednesday as traders tried to regain their balance after back-to-back losing sessions.
The Dow Jones Industrial Average rose 149.87 points, or 0.46%. The S&P 500 gained 0.55% and the Nasdaq Composite rose 0.85%, boosted by gains in technology stocks. Shares of Amazon, Tesla, Apple and PayPal opened higher.
The earnings season continued, giving investors hope that the market can recover. Moderna and CVS Health rose after reporting earnings.
The comments of the chairman of the Federal Reserve of St. Louis, James Bullard, also added to the sentiment. He told CNBC Wednesday morning that he does not believe the U.S. is currently in a recession and that rate hikes to control high inflation will continue.
“We’re going to have to see compelling evidence across the board, headlines and other measures of core inflation all coming down convincingly before we can feel like we’re doing our job,” Bullard said during a live “Squawk Box interview.”
Traders shrugged off anxiety that House Speaker Nancy Pelosi’s visit to Taiwan could further strain already strained US-China relations. China had spent weeks warning her against the trip. Markets fell further after three Federal Reserve chairmen hinted that more rate hikes would be needed to combat high inflation.
Traders also digested mixed comments from Federal Reserve officials. Bullard said on Tuesday that he was confident the US economy could achieve a “soft landing”. Meanwhile, San Francisco Fed President Mary Daly said the central bank’s work to control inflation is “far from over,” while Chicago Fed’s Charles Evans said there chances of a smaller rate hike at the next monetary policy meeting.
“While most of today’s attention is still focused on the Federal Reserve and its ongoing struggle to control inflation, many economic policies have already embarked on a new cycle of easing,” he said Jim Paulsen of The Leuthold Group. “The prospect of lower inflation is not only helping to usher in a new cycle of easing, but is likely to fuel a revival of private sector confidence that has untapped potential.”
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Traders are also anticipating another batch of second-quarter earnings. CVS, Regeneron, Under Armor and Moderna will report before the bell on Wednesday.
In economic data, investors this week await mortgage demand numbers and PMI data on Wednesday. They will also look at the non-farm payrolls report for July, due on Friday.