Stocks rise to recover some losses, Intel shares jump

Stocks rose on Wednesday, with each of the three major indexes on track to recover some losses from Tuesday.

The Dow gained about 100 points, or 0.3%, as shares of component Intel (INTC) jumped after the company announced a $20 billion investment into building out its in-house chip manufacturing operations to catch up with competitors. The Nasdaq rose by more than 0.5%, and the S&P 500 gained 0.3%. Treasury yields steadied, and the benchmark 10-year yield hovered around 1.64% after hitting a 14-month high of more than 1.75% last week. 

A day earlier, the Dow dropped by more than 300 points, or about 1%, for its worst session in nearly three weeks. The S&P 500 also dipped, and the Nasdaq shed more than 1% as technology stocks added to recent declines. Many of the cyclical stocks that had led markets higher for much of the last three months underperformed, and the industrials, energy and financials sectors lagged. 

“I think what we’ve seen over the past couple days is some end-of-quarter positioning,” Tom Essaye, Sevens Report Research founder, told Yahoo Finance. “The best performers quarter-to-date are getting sold right now, some of the worst performers are rallying. That’s typical as we end a quarter.”

“But then also, the outlook on COVID has dimmed a bit – not so much here in the United States, but definitely in Europe, where they seem to be experiencing a third wave,” he added. Overseas, Germany extended its stringent lockdown measures for another month, and the European Union was reportedly contemplating imposing temporary export restrictions of its COVID-19 vaccines. “The vaccine rollout there is not going so well as we know, and now you’re seeing increased lockdowns.”

Investors have also been digesting remarks from a parade of Federal Reserve speakers this week. Much of the commentary has served to reinforce the central bank’s stance that any inflation appearing this year will be transitory, and not significant enough to warrant a shift in their monetary policy positioning. Last week, the Federal Reserve’s updated projection material showed the median forecast among Federal Open Market Committee participants was still to keep benchmark interest rates near zero through at least 2023.

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Federal Reserve Chair Jerome Powell told the U.S. House Committee on Financial Services on Tuesday that he expects a temporary increase in inflation in the coming months compared to the same period last year, but that the forthcoming rises will be short-lived since so many Americans will still be out of work as the economy recovers from the pandemic.

Other members of the Federal Open Market Committee echoed similar sentiments. Federal Reserve Governor Lael Brainard said during a virtual event Tuesday that “it will take some time to achieve substantial further progress” on the Fed’s goals of achieving maximum employment and sustainable 2% inflation. She advocated “a patient approach based on outcomes rather than a preemptive approach based…