- Stocks were racing higher Thursday, with the tech-heavy Nasdaq leading the way.
- Strong corporate earnings provided support.
- On Wednesday, the major averages wiped out their gains for the year.
US stocks made a comeback Thursday, the day after the major averages wiped out their gains for the year. Buoyed by solid corporate earnings, Thursday’s advance has traders putting worries about rising interest rates and the prospect of a slowdown in global economic growth on the back burner — at least for a day.
The tech-heavy Nasdaq (+3%) led the way higher after sliding into a correction Wednesday when it fell more than 10% below its recent peak. The Dow Jones Industrial Average (+1.37%) and the S&P 500 (+1.57%) also posted impressive gains.
The Nadsaq got a boost from Tesla (+8.1%) reporting a surprise profit after Wednesday’s close and Twitter (+15.5%) announcing impressive results ahead of Thursday’s opening bell. Despite the strong results, the social-media company said it lost millions of users. AMD (-14.9%) bucked the trend, disappointing on both revenue and guidance.
Numerous worries have weighed on Wall Street in October, sending the major averages down by 9% to 13% from their recent peaks. Traders have been grappling with the prospect of the Federal Reserve hiking interest rates at a faster pace than expected, with even President Donald Trump voicing those concerns.
“Every time we do something great, he raises the interest rates,” Trump told The Wall Street Journal, adding that Federal Reserve Chairman Jerome Powell “almost looks like he’s happy raising interest rates.”
But that’s not all. A slowdown in China, which recently posted its weakest growth in a decade, has some sounding the alarm about a slowing global economy.
“Overall, earnings results are good, but pockets of results, such as those in the Industrials sector, show the impact of tariffs and the slowdown in global trade,” Jason Draho, the head of American asset allocation at UBS, said on Wednesday.
Elsewhere, West Texas Intermediate crude oil (+1.3%) spiked back over $67 a barrel after the OPEC cartel of oil exporters warned that swelling oil inventories could be driving the market toward oversupply and said it would adjust output accordingly.
Light selling in the bond market has the 10-year yield up 2 basis points at 3.126%.