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The rally also extended to Europe. The Frankfurt bourse’s index was up around 1.5%.
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Stocks were rebounding from a Tuesday rout, with markets watching key economic data as well.
By late morning, the
Dow Jones Industrial Average
was up 427 points, or 1.2% after a 1.9% fall Tuesday, and the
S&P 500
rose 1.6% after declining 1.9% the day before. The
Nasdaq Composite
was up 1.5% after falling 1.6% Tuesday.
“US stocks are rebounding on Wednesday after another steep selloff in the previous session,” wrote Fiona Cincotta, senior financial markets analyst at City Index. “Today, the mood in the market has improved.”
Tuesday, stocks spiraled after large Covid-19 vaccine and treatment producers said their remedies were likely to be less effective at immunizing against the new variant, Omicron. Plus, Federal Reserve Chair Jerome Powell said the Fed may soon consider upping the pace of its tapering, or the reduction of its bond buying program. The combination sent the S&P 500 to a level almost 3% below its all-time high, hit in November.
Now, investors are swooping up stocks that had been on sale, though the S&P 500 and the Dow remain below their highs.
Alongside a rising stock market, investors are generally moving out of safer assets and into riskier ones. The price of the 10-year Treasury bond dipped as the yield ticked up to 1.49%, after having hit as low as 1.42% Tuesday. WTI crude oil was rising more than 3% to over $68 a barrel.
Investors are also mulling over the latest economic data. The ADP jobs report revealed that the U.S. added 534,000 private-sector jobs in the month of November, beating estimates of 525,000. This is the second strong jobs report in a row, but that could mean the Fed may reduce support from markets and the economy more quickly. To be sure, the more reliable job market data point will be Friday’s employment report from the Bureau of Labor Statistics.
The Institute for Supply Management’s manufacturing index increased to a reading of 61.1 in November, in line with economists’ expectations.
Though the market feels more optimistic Wednesday, the Omicron issue hasn’t gone away. It could cause countries to implement lockdowns, which Austria has already shown a willingness to do. “Market volatility will be elevated due to the uncertainty of the efficacy of vaccines,” wrote Richard Saperstein, chief investment officer at Treasury Partners. “A successful outcome of vaccine manipulation will be a significant…
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