By NEW YORK — Big technology stocks are bouncing back and boosting U.S. indexes on Wall Street Wednesday, one of the day’s many sharp swings for financial markets around the world.
The S&P 500 was rallying by 1.6% in afternoon trading and on track for its best day in five months. The Dow Jones Industrial Average was up 294 points, or 0.7%, as of 12:51 p.m. Eastern time, and the Nasdaq composite was 2.4% higher.
The moves were even bigger in the oil market, where prices jumped 3.9% after the death of Hamas’ political leader raised worries about the flow of crude in the Middle East, while the Japanese yen strengthened against the U.S. dollar after the Bank of Japan raised its benchmark interest rate.
In the U.S. bond market, Treasury yields were easing ahead of a decision on rates by the Federal Reserve coming in the afternoon. Virtually no one expects it to make a move, but a batch of economic reports released during the morning strengthened expectations that a cut to interest rates will come at the Fed’s next meeting in September.
On Wall Street, Advanced Micro Devices rallied 4.4% after reporting better profit and revenue for the latest quarter than analysts expected, thanks in part to accelerating artificial-intelligence business. That helped drive Nvidia, the chip company that’s become the poster child for Wall Street’s frenzy around AI, up 10.7% a day after it lost 7%.
How such Big Tech stocks perform matters a lot because they’re Wall Street’s most valuable companies, and that gives them the biggest sway on the S&P 500. A handful of these stocks, known as the “Magnificent Seven,” drove the U.S. stock market to dozens of records this year, even as many other stocks struggled under the weight of high interest rates. But they ran out of momentum this month amid criticism they had grown too expensive and expectations had run too high.
Such criticism hasn’t gone away, and Microsoft fell 1.9% despite reporting profit and revenue for the latest quarter late Tuesday that edged past analysts’ expectations. Growth in its Azure cloud-computing business fell a bit shy of analysts’ forecasts.
That followed profit reports from Tesla and Alphabet last week that investors found underwhelming, which raised concerns that other Magnificent Seven stocks could also fail to impress. Meta Platforms will report its latest quarterly results after trading closes for the day, while Amazon and Apple will follow on Thursday.
Stronger-than-expected profit reports from companies outside the Magnificent Seven were also helping to support the market on Wednesday.
Match Group jumped 15% after saying its user trends for Tinder are stabilizing and reporting results for the latest quarter that roughly matched analysts’ expectations.
DuPont rose 5.2% after delivering better profit and revenue than expected, thanks in part to a recovery for the electronics business, and the chemical giant raised its financial forecasts for the full year.
They helped offset a 3.7% drop for Altria Group after the maker of cigarettes and smoke-free products fell short of expectations for profit and revenue in its latest quarter.
In the bond market, the yield on the 10-year Treasury slipped to 4.10% from 4.14% late Tuesday and from 4.70% in April. It’s been falling as a slowdown in inflation raises expectations for coming cuts to interest rates by the Federal Reserve.
A couple of softer-than-expected reports on the U.S. economy Wednesday raised hopes the Fed may hint later in the afternoon that cuts to interest rates may indeed arrive at its next meeting. One report showed U.S. employers spent less in total pay and benefits for workers during the spring than economists expected. Another suggested hiring by employers outside the government was a touch weaker than expected.
While workers would surely like stronger such numbers, it could be the type of “Goldilocks” data that Wall Street is looking for: not so strong that it pushes upward on inflation but not so weak that it raises worries about a recession.
Some of Wednesday’s strongest action was in the oil market, where a barrel of benchmark U.S. crude rose 2.8% to $77.51.
Hamas’s top political leader Ismail Haniyeh died in a predawn airstrike in the Iranian capital early Wednesday, Iran and the militant group said, blaming Israel for a shock assassination that could escalate conflict in the region and potential disrupt the flow of oil.
There was no immediate comment from Israel, which has pledged to kill Haniyeh and other Hamas leaders over the group’s Oct. 7 attack on southern Israel in which the Palestinian militant group killed 1,200 people and took some 250 others hostage.
Brent crude, the international standard, rose 3.2% to $80.59.
In stock markets abroad, Japan’s Nikkei 225 rose 1.5% after Bank of Japan raised its benchmark interest rate to about 0.25% from a range of zero to 0.1%.
Indexes rallied 2.1% in Shanghai and 2% in Hong Kong after official data showed China’s July manufacturing activity contracted for a third straight month, fueling expectations that Beijing will need to roll out more stimulus to counter a slowdown for the world’s second-largest economy.
Stock indexes also rose across Europe.
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AP Business Writer Matt Ott contributed.
