Stocks rise modestly on Wall Street a day after rout


Stocks edged up in morning Wall Street trading on Wednesday as the market recovered from a steep drop a day earlier.

The S&P 500 was up 0.5% at 10:06 a.m. Eastern time. The Dow Jones Industrial Average rose 138 points, or 0.4%, to 34,438 and the Nasdaq rose 0.7%.

Tech stocks made strong gains in a reversal from the previous day when they led the market down. Much of this pressure came from rising bond yields which scared investors. The higher yields have forced investors to re-evaluate if the prices have been too high for stocks, especially tech companies, as it makes their prices appear expensive.

Apple rose 1.6% and chipmaker Nvidia rose 1.2%.

Bond yields eased and took some pressure off investors who had seen them rise sharply over the past week. The 10-year Treasury yield, which is used to set interest rates on many types of loans, fell to 1.51% from 1.53% on Tuesday night.

Oil prices edged down 0.3% and held back energy stocks.

Asian markets mostly fell while European markets rose.

The broader market is still on track for a disappointing September. The benchmark S&P 500 is heading for a loss of 3.2% and its first month losing since January. Investors spent much of the month examining a mixed batch of economic data that showed the impact of COVID-19 and the highly contagious delta variant on consumer spending and the labor market recovery.

Investors are still watching the Federal Reserve closely to assess the impact of slowing economic growth on the speed of its plan to eventually ease its exceptional support to the economy. The central bank said it plans to eventually cut back on bond purchases that have helped keep interest rates low.

Wall Street is also gearing up for the next round of corporate earnings in the coming weeks. Investors will get a more detailed look at the impact of supply chain issues and higher costs on business finances. Sherwin-Williams is the latest company to warn that rising raw material costs will hurt profits.

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