Major U.S. indices closed higher on Wednesday, driven by a rally in technology stocks amid ongoing geopolitical concerns.
The Dow Jones Industrial Average surged 431.63 points, or 1%, to reach a record close of 42,512.00 on Wednesday, while the S&P 500 rose 0.7% to finish at an all-time high of 5,792.04. The Nasdaq Composite also gained 0.6%, closing at 18,291.62.
Major tech companies like Amazon and Apple posted gains of more than 1%, with Super Micro Computer rallying 4%, pushing the broader indexes into positive territory for October.
The stock market’s strong performance helped offset a rocky start to the month.
Investor sentiment was buoyed by the release of the Federal Reserve's September meeting minutes, which revealed that a "substantial majority of participants" favoured a 50-basis point rate cut.
This has furthered optimism that the Fed is successfully navigating the balance between cooling inflation and maintaining economic growth.
Despite the Fed’s dovish tone, geopolitical concerns, including the potential for a broader conflict in the Middle East, continue to loom over markets. However, these fears did little to dampen the rally on Wednesday.
While U.S. markets surged, global sentiment was more mixed. The iShares China Large-Cap ETF fell 1.2% after the China Shenzhen Index recorded its worst day since 1997.
Investors in China locked in profits from a recent rally driven by economic stimulus measures, leading to a sharp pullback.
Shares of Alphabet dropped 1.5% after reports emerged that the U.S. Department of Justice is considering a potential breakup of the tech giant, further weighing on sentiment in international markets.
Looking ahead, investors are focused on upcoming economic data, with September's Consumer Price Index (CPI) due out on Thursday, followed by the Producer Price Index (PPI) on Friday. Both reports are expected to provide further insight into inflationary pressures and the Federal Reserve's potential rate path.
Additionally, the start of earnings season is set for Friday, with JPMorgan Chase and Wells Fargo among the first major banks to report their quarterly results. Wall Street will be closely monitoring these reports for clues about the health of the financial sector and broader U.S. economy.
On the bond markets, 10-year and 2-year rates were at 10-week highs of 4.073% and 4.022%, respectively.