On Wednesday, US stocks finished the day higher, with a 1.6% gain recorded by the tech-heavy Nasdaq because of positive earning signs, with a close eye on interest rate hikes by the US Fed and inflation.
There was a 7.4% gain recorded in Netflix stocks, after the prediction of the company about returning to customer growth in the next quarter. The second quarter saw it post a significantly less-than-expected drop in its number of subscribers.
Gains in other high-growth stocks also rose, after the forecast of the streaming giant. The shares of Meta Platforms Inc., Microsoft Corp, Amazon.com Inc., and Apple Inc. rose between 1% and 4.2%. There was also a 2% gain recorded in shares of Tesla, as the electric car maker posted an increase in its quarterly profit after markets closed.
Due to soaring inflation, markets had earlier priced in a massive 100 basis points increase in the interest rate at the upcoming meeting of the US Federal Reserve in the next week. However, this changed when some policymakers indicated that a 75 basis points rise was more favorable.
Market analysts said that equity prices appeared to be on a rollercoaster, as earnings, inflation, and interest rates are contributing to the volatility. They said that another bout of reporting cycles would be needed to assess if inflation was coming under control or not. They expect a 5.9% growth in the year-on-year profits for the S&P 500, which is down from the 6.8% that had been expected earlier.
There was a 0.15% gain in the Dow Jones Industrial Average, which saw gains of 47.79 points to reach 31,874.84. A 0.59% rise saw the S&P 500 increase by 23.21 points to end the day at 3,959.9, while a 1.58% advancement in the Nasdaq Composite saw it go up by 184.50 points to 11,897.65.
Out of the 11 sectors of the S&P 500, seven of them advanced, with the biggest gains recorded in information technology and consumer discretionary stocks. Trading volumes remained thin, which led to more volatility in the markets. The CBOE Volatility Index closed at the lowest value of 23.79 points seen in almost three months.
The trading volume on US exchanges was about 11.51 billion shares, as opposed to the full session average of 11.43 billion shares recorded in the last 20 days. According to experts, low volumes often drive more moves in the market. Therefore, even though global equities have wiped out $10 to $15 trillion this year, the market still has a lot of excess liquidity.
This leads to more volatility in the extra liquidity. The largest loser in the S&P 500 was Baker Hughes Co, which recorded a fall of 8.3%. This was because the oilfield services provider posted a bigger loss for the second quarter and its adjusted profits did not hit estimates. There was just one new high in the S&P 500, while new lows were about 29. The Nasdaq Composite saw 29 new highs and new lows were 38.