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Stocks rise, fueled by tech rally, as all major averages touch highest since early June

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Stocks rose on Wednesday, fueled by a rally in tech stocks, as all major averages reached their highest point since early June.

The Nasdaq Composite jumped 1.58% to 11,897.65, and the S&P 500 advanced 0.59% to three,959.90. Meanwhile, the Dow Jones Industrial Average was up 47.79 points, or 0.15%, to 31,874.84 — lagging the opposite two benchmarks and alternating between gains and losses in the course of the session.

Wednesday marked the best closing level for the Nasdaq since June 8 – and the best since June 9 for the Dow and the S&P 500.

Those moves follow Tuesday’s rally as investors, betting that markets can have finally found a bottom, shifted into more dangerous assets reminiscent of tech stocks.

“It form of speaks to the risk-on environment we proceed to be in that began the start of this week, and has played through this Tuesday and into Wednesday timeframe,” said Art Hogan, chief market strategist at B. Riley Financial.

Information technology and consumer discretionary stocks led gains within the S&P 500, with each sector up greater than 1% on Wednesday. Meanwhile, more defensive sectors reminiscent of health care and utilities lagged the broader market index.

Semiconductor stocks outperformed after the Senate pushed forward a $50 billion bill to bolster chip manufacturing within the U.S. Shares of Advanced Micro Devices jumped 4.1%, Nvidia was up 4.8%, and Qualcomm advanced 2.9%.

Streaming stocks surged on the back of better-than-expected earnings from Netflix, which said it lost 970,000 subscribers within the second quarter, lower than the two million it had previously projected. The streaming giant’s per-share earnings also got here in above analyst expectations.

Shares of Netflix jumped about 7.4%. Disney advanced roughly 3.8%. Paramount climbed 3.8%, and Roku surged 6.9%.

Meanwhile, bitcoin breached the $24,000 threshold for the primary time in greater than a month.

Some investors have been encouraged by the recent trading motion, believing it’s signaling that the bear market has bottomed. NYSE stocks achieved a widely followed “90% up day” on Tuesday with greater than 90% of stocks listed on the exchange advancing and accounting for greater than 90% of the quantity.

Investors pointed to a Bank of America survey that suggested deteriorating sentiment could potentially arrange a buying opportunity out there. Meanwhile, the U.S. dollar, which recently surged to a 20-year high against the euro, softened Tuesday.

“We view this bullish breadth day as an indication that the summer rebound for U.S. equities can proceed,” wrote Stephen Suttmeier, technical research strategist for Bank of America, in a note Wednesday.

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Still, other market participants were skeptical of the bounce, as they await more earnings and seek for more clues into the state of the U.S. economy.

“History says, but doesn’t guarantee, that yesterday was more likely a bear market bounce than the beginning of a latest bull market,” said Sam Stovall, chief investment strategist at CFRA Research.

On the economic front, a report from the Mortgage Bankers Association pointed to more pain for home shoppers as they take care of higher prices and rates of interest. Mortgage demand declined greater than 6% last week compared with the prior week, dropping to its lowest level in 22 years.

At the identical time, existing home sales in June fell 5.4% from May, in line with the National Association of Realtors.

Busy earnings

About 12% of S&P 500 corporations have reported earnings to date this quarter. Of those, 68% have beaten analyst expectations, in line with FactSet. Investors had been awaiting this earnings season for clues on how corporations are coping with the worst inflation in greater than 40 years.

Baker Hughes dropped nearly 8.3% after disappointing second-quarter earnings. The oilfield services company reported earnings of 11 cents per share, which is half what analysts were expecting, in line with Refinitiv.

Biogen declined 5.8% despite posting a beat in its latest quarterly report. The corporate warned that its revenue could take a success from growing generic competition.

Tesla and United Airlines are slated to post their latest quarterly results after the close.

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