U.S. stocks rose and government-bond yields fell Wednesday following a recent climb, potentially easing some pressure on technology shares.
The S&P 500 rose 0.9% shortly after the opening bell. The broad index rose Tuesday as investors snapped up shares of companies across industries. The Dow Jones Industrial Average climbed 243 points, or 0.6%, and the Nasdaq Composite added 1.0%.
Shares of
parent Meta Platforms rose 1.6% and Google parent Alphabet added 1.1% in morning trading. Technology companies tend to benefit from low bond yields as some investors will pay more for shares that they expect to churn out outsize profits in the future. This reverses when yields rise.
The yield on the benchmark 10-year Treasury note ticked down to 1.930% Wednesday from 1.954% Tuesday, its highest closing level since July 2019. Yields move inversely to prices and have been rising amid expectations for Federal Reserve interest-rate increases.
European bonds yields also fell Wednesday, with the yield on the 10-year German bund ticking down to 0.218% from 0.264% Tuesday, according to
Tradeweb.
Uber Technologies and Walt Disney are slated to post results late Thursday. Shares of
Chipotle Mexican Grill
rose 7.8% after it said it had increased menu prices again and was likely to raise them further this year.
Lyft
fell 2.1% after the ride-hailing company posted weaker-than-expected ridership numbers.
CVS Health
fell 3.4% after the drugstore chain reported quarterly results that beat expectations, but provided a mixed full-year outlook.
Investors are monitoring factors that could affect earnings, including the anticipated increase in interest rates, elevated inflation and supply-chain disruptions. As of late last week, 34 companies in the S&P 500 had given lower earnings guidance than analysts expected, while 13 companies had issued higher guidance, according to FactSet.
Fresh inflation data due Thursday is expected to give investors additional clues as to how quickly the Fed may raise rates, having slashed them in 2020 to cushion the economy from the impact of Covid-19. The prospect of higher borrowing costs globally has heightened volatility in stocks this year, particularly tech ones.
The prospect of higher borrowing costs globally has heightened volatility in stocks this year.
Photo:
David L. Nemec/Associated Press
“All market participants are now trying to gather more information on how this global turnaround of central banks will happen,” said
Carsten Brzeski,
ING Groep’s
global head of macro research. “There’s a question of how stock markets will adjust to this new normal.”
Overseas, the pan-continental Stoxx Europe 600 rose 1.7%. Shares of Dutch payment company Adyen jumped around 9% after it reported a profit rise that beat market expectations.
The Russian ruble rose 0.4% against the dollar. French President
Emmanuel Macron
shuttled from Moscow to Kyiv on Tuesday in an attempt to avert conflict between Ukraine and Russia. Some investors hope that continuing communication will reduce the chances of tensions escalating, Mr. Brzeski said.
In Asia, major stock indexes closed with gains. Hong Kong’s Hang Seng jumped 2.1% and Japan’s Nikkei 225 added 1.1%. China’s Shanghai Composite and South Korea’s Kospi gained 0.8% each.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
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