4.05pm: Dow bounces back, rising 91 points
US stocks finished the trading session mixed, with the S&P 500 moving up following its biggest one-day drop since May, as easing Treasury yields helped calm some investor stagflation jitters.
At the close, the Dow rose 91 points to 34,391, while the S&P 500 edged up seven points at 4,360 and the tech-heavy Nasdaq moved 34 points lower to 14,512.
Notable movers included shares of Dollar Tree, Inc, which surged more 16% after the discount retailer said it was increasing its stock buybacks and experimenting with higher prices in some locations.
12:05pm: US equities rally a day after rout
US stocks increased higher midday in a comeback rally as the 10-year Treasury yield retreated.
The 10-year Treasury Treasury yield eased on Wednesday to trade near 1.5% after touching a high of 1.567% the day before, helping to cause a major market retreat. The Nasdaq Composite fell 2.8% to post its worst day since March.
As of noon, the Dow Jones Industrial Average was up 217 points, or 0.62%, at 34,517. The S&P 500 rose 21 points, or 0.49%, to 4,373,
The tech-heavy Nasdaq increased 28 points, or 0.19%, to stand at 15,575.
Chris Beauchamp, chief market analyst at online trading group IG, said that stagflation concerns have eased among investors and bargain hunters are piling into the market.
"A small drop in Treasury yields has eased some of the pressure on equities, and with market internals approaching ‘washout’ levels again the urge to buy the dip has come storming back,” he said.
“One more day of Q3 remains, and volatility remains elevated compared to the summer levels, but current market action still has a ‘clearing the decks’ feel to it as the last vestiges of summer trading are swept away and investors prepare for Q4, many no doubt hoping that it will once again prove to be a good quarter for stock markets.”
The biggest gainer on the day so far is Lucid Group Inc (NASDAQ:LCID), up 8.2% to $26.54 a share on the Nasdaq.
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9.47am: US shares start ahead
US stocks nudged higher in early deals in New York as the recent steep rise in US bond yields eased back a bit and tech stocks bounced back.
The Dow Jones Industrial Average added over 31 points at 34,331, while the S&P 500 gained around eight points at 4,361. The tech heavy Nasdaq exchange gained around 56 points to stand at 14,603.
The 10-year US Treasury note yield dropped a bit on Wednesday at 1.508% after reaching a high of 1.567% Tuesday.
On the corporate front, Facebook shares added 0.51%, while Apple gained 0.87%. Alphabet nudged up 0.100%.
7.00am: US stocks seen recovering at open
US stocks are expected to open higher on Wednesday, recovering from steep losses as US Treasury yields rose to near three-month highs and investors dumped interest-rate sensitive tech stocks. The Nasdaq Composite fell the most since March on Tuesday while the broader S&P 500 suffered its biggest single-day drop since May.
Futures for the tech-laden Nasdaq-100 rose 0.95% in pre-market trading, while Dow Jones Industrial Average futures added 0.57%, and those for the broader S&P 500 index gained 0.71%.
Federal Reserve chair Jerome Powell did little to allay concerns of tighter US monetary policy when he appeared before the Senate Committee on Banking, Housing, and Urban Affairs on Tuesday to discuss the state of the economic recovery. Powell and US Treasury Secretary Janet Yellen also warned of the risks if Congress fails to pass a bill to fund the government and raise the country’s debt ceiling next month, adding to market jitters.
“Global investors are trying to find a clear narrative even as they grapple with the cross-currents that are buffeting the broader market outlook,” said Han Tan, chief market analyst at Exinity Group.
“Investor sentiment is hunting for a clear signal amid the cacophony stemming from a multitude of fears. These include a potentially “catastrophic” default by the US Treasury, in Janet Yellen’s estimation, possible contagion out of the China Evergrande saga and even the risk of stagflation.”
Skyrocketing prices for natural gas, oil, and cotton have only amplified the notion that inflationary pressures may decimate the Fed’s “transitory” view, which could, in turn, crimp global economic prospects, Tan said.
“Such a darkening outlook has soured risk sentiment and may have prompted this shakeup in asset allocations ahead of the final quarter of the year.
“Perhaps more solemnly, recent price action could herald a potential end to the heady days of risk-taking activities that have been aided by the Fed’s ultra-accommodative stance.”
Five more things to look out for on Wednesday:
US pending home sales figures for August and the MBA's weekly mortgage applications are due for release in a quiet day for economic data.
US Fed chair Jerome Powell will take part in an ECB virtual panel discussion alongside his counterparts from the ECB, BoE and BoJ, and the Philadelphia Fed’s Harker will speak on the economic outlook.
Attention will be focused on Capitol Hill, to see whether Democrats and Republicans can find a way forward to avert a government shutdown on Friday.
Netflix stock declined 1.5% in pre-market trading after it said it bought videogame maker Night School Studio to diversify its revenue sources.
Warby Parker debuts on Wall Street today after the eyewear maker went public via a direct listing at a reference price of $40 per share, valuing it at nearly $5 billion.