After a noticeable drop in the two preceding sessions, stock markets have once again begun to rally during Wednesday's trades. Although all the major averages have made a comeback, they are yet to hit the recently noted record highs.
As the day progresses, the major averages have receded from their peak levels, but remain positive. The Nasdaq has surged by 106.72 points or 0.7 percent, settling at 16,046.31, while the S&P 500 has increased by 31.29 points or 0.6 percent, arriving at 5,109.94. The Dow Jones has also seen progress, climbing 150.23 points or 0.4 percent to 38,735.42.
A significant driver of the rebound on Wall Street has been the positive response to Federal Reserve Chair Jerome Powell's congressional testimony. Powell indicated to the House Financial Services Committee that there might be a need for the Federal Reserve to lower interest rates at some point this year. However, he also reiterated that officials require greater assurance that inflation is on a stable path towards 2 percent.
According to Powell, the economic outlook remains uncertain, and the advancements towards the Federal Reserve's 2 percent inflation objective is not secure. Powell warned against either reducing policy restraint too soon or too much which could reverse the progress seen in inflation, while also pointing out that delaying or limiting policy restraint could have a detrimental impact on economic activity as well as employment.
Powell mentioned that future interest rate decisions will depend on a meticulous analysis of incoming data, the evolving outlook, and risk assessments.
Moreover, payroll processor ADP's report indicated a smaller-than-expected increase in private sector employment in the U.S. in February. According to ADP, private sector employment rose by 140,000 jobs in February following an upwardly revised figure of 111,000 jobs added in January.
On the sector front, Computer hardware stocks have seen a sharp rise during the day, causing the NYSE Arca Computer Hardware Index to surge by 3.0 percent. Similarly, semiconductor stocks reflected a 2.5 percent surge, and gold stocks performed strongly due to a moderate increase in the price of the metal, causing a 2.0 percent increase in the NYSE Arca Gold Bugs Index.
On the other hand, international markets presented mixed results on Wednesday. Hong Kong's Hang Seng Index rose by 1.7 percent, while Japan's Nikkei 225 Index remained mostly stagnant and China's Shanghai Composite Index fell by 0.3 percent. European stocks, on the whole, were slightly buoyant with the German DAX Index and the U.K.'s FTSE 100 Index rising by 0.4 and 0.3 percent respectively, while the French CAC 40 Index remained unchanged.
In the bond market, treasuries extended the robust upward trend observed in the previous session. Consequently, the yield on the benchmark ten-year note, which moves inversely to its price, is down by 2.7 basis points at 4.110 percent.
