U.S. stocks rose on Wednesday, the major indexes’ first winning session in August, thanks to fresh earnings reports and a key reading for the services sector.
The S&P 500 rose 63.98 points, or 1.6%, to 4,155.17, recovering some losses after losses on Monday and Tuesday. The Dow Jones Industrial Average added 416.33 points, or 1.3%, to 32,812.50. The tech-heavy Nasdaq Composite gained 319.40 points, or 2.6%, to 12,668.16.
Stocks have come under fresh pressure in recent days from geopolitical tensions as US House Speaker Nancy Pelosi met with Taiwan’s president despite warnings from China. Federal Reserve officials, meanwhile, said the central bank was likely to continue raising interest rates at upcoming meetings, dashing hopes in markets that slowing economic growth could signal a change in policy.
So far, Ms. Pelosi’s trip has had no tangible impact, and some better-than-expected earnings reports amid low liquidity in August are lifting sentiment.
A key economic report also helped boost the market’s gains. The U.S. services sector continued to expand in July, according to a report from the Institute for Supply Management. The ISM index for businesses such as restaurants, hotels and retailers hit a three-month high in July..
The yield on the benchmark 10-year Treasury note rose to 2.747% from 2.740% on Tuesday. Weak economic data weighed on yields in recent days. There are “increased concerns that the US economy could slow sharply.
Whether the economy is technically in recession or not, inflation and the pressure it is putting on the Fed to raise interest rates is creating an environment for investors that is fundamentally different from anything they have seen in the past few decades.
In corporate news, PayPal shares jumped $8.29, or 9.3%, to $97.92 after hedge fund Elliott Management confirmed it has a $2 billion stake in the payments company. Starbucks rose $3.56, or 4.3%, to $87.27 after it said demand was still strong and price increases partially offset higher labor costs.
Vaccine maker Moderna rose $25.68, or 16%, to $186.49 after it reported earnings that beat analysts’ estimates and said it would launch a new $3 billion share buyback program.
Airbnb fell $1.32, or 1.1%, to $115.02 after it said it had returned to profit, but its outlook disappointed investors. Online dating group Match fell $13.47, or 18%, to $63.24 after posting results that missed estimates and saying the chief executive of its Tinder platform was leaving the company.
Chipmaker Advanced Micro Devices fell $1.20, or 1.2%, to $98.09 after reporting a drop in profit and issuing guidance for the current period that fell short of Wall Street expectations.p>
Oil prices fell after an OPEC+ meeting in which members agreed to a smaller-than-expected increase in production, according to delegates. US crude fell 4% to $90.66 a barrel.
The Stoxx Europe 600 rose 0.5%. U.K.-listed cybersecurity firm Avast jumped 44 percent after a U.K. regulator said it had provisionally cleared NortonLifeLock’s $7.3 billion acquisition of the company. French bank Société Générale rose 3.1% after reporting a narrower-than-expected loss despite its exit from Russia.
In Asia, headlines were mixed. The Shanghai Composite fell 0.7 percent, extending losses after closing 2.3 percent lower on Tuesday. Hong Kong’s Hang Seng added 0.4% and Japan’s Nikkei 225 rose 0.5%.
Dealer Anatoliy Pavlov