S&P 500 rises for a 3rd day as comeback rally continues
U.S. stocks rose on Wednesday led by energy shares, as the market’s comeback rally extended into a third day.
The S&P 500 gained 0.1% for a third straight positive day, sitting 0.16% from an all-time high. The Dow Jones Industrial Average last traded near the flatline. The Nasdaq Composite was 0.25% higher and reached an intraday record earlier Wednesday after closing at a fresh high in the previous session.
Energy names including Exxon Mobil and Chevron climbed as oil prices continued to rise. Brent crude topped $75 a barrel to hit a two-year high on Wednesday. Diamondback Energy and Occidental Petroleum jumped about 4% each.
Many major technology names also traded in the green. Tesla jumped 4.5%, while Netflix gained over 1%. Facebook and Alphabet also traded higher.
The S&P 500 has risen 2% this week, bouncing back from a sell-off last week triggered by the Federal Reserve’s surprise policy shift. The central bank projected much higher inflation for the year than previously, while signaling two rate increases as soon as 2023.
For June the S&P 500 and Nasdaq Composite are in the green, rising 1.2% and 4%, respectively. The Dow, however, is in the red for the month amid weakness in Caterpillar and JPMorgan.
“Stocks are facing a full count setup in the second half,” said Craig Johnson, chief market technician at Piper Sandler. “Risk for tighter monetary policy appears to growing along with uncertainty over market leadership, the trajectory of the economic recovery, and the sustainability of inflation. This backdrop will likely create some volatility curveballs, but not strikeouts for the secular bull market.”
Fed Chairman Jerome Powell testified before a special House panel on Tuesday, which appeared to lift sentiment as he reiterated that inflation pressures will be temporary.
Powell cited airline tickets, hotel prices and lumber along with generally surging consumer demand pumping up an economy that a year ago faced substantial government-imposed restrictions in the early days of the pandemic. Those factors, he said, should “resolve themselves” in the coming months.
“They don’t speak to a broadly tight economy and to the kinds of things that have led to higher inflation over time,” he told the House Select Subcommittee on the Coronavirus Crisis.
Bitcoin staged an impressive comeback on Tuesday that was carrying through on Wednesday. On Tuesday, the cryptocurrency at one point dipped below $30,000 and erased its gains for 2021. But bitcoin ultimately recouped all of the more than 11% loss and finished the session in positive territory, according to data from Coin Metrics.
At last check, bitcoin was up another 4% to above $34,000 on Wednesday.
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