Strong gains on tech-driven Wall Street

Wall Street indexes posted strong gains in Wednesday’s session, erasing some of the previous two-day losses, led by the technology sector. Investors’ buying mood was fueled mainly by the positive messages from the corporate results front and the encouraging data for the US economy announced earlier.

US indices moved sharply higher from the very beginning of the session, as yesterday’s jitters caused by renewed tension in Sino-US relations as a result of the visit of the speaker of the US House of Representatives, Nancy Pelosi, to Taiwan, which caused the reaction from Beijing which considers Taiwan a part of China.

Pelosi’s visit to Taiwan raised concerns that it could spark a new round of friction between the US and China, with adverse trade effects, at a time when supply chains continue to struggle from the initial shock of the pandemic. coronavirus and the strict lockdowns of the economies and then Russia’s war in Ukraine.

However, Pelosi’s visit to Taiwan ultimately ended without serious consequences as Beijing reacted relatively coolly, allowing investors to focus on corporate results, which appear to be not as bad as expected.

Investor sentiment was also boosted by encouraging data on the US economy announced today.

In particular, as the survey by the Institute for Supply Management showed, the service sector in the US showed an improvement in July. In particular, the ISM announced that the non-manufacturing PMI index rebounded to 56.7 points last month from 55.3 points in June, ending a streak of three consecutive months of slowdown.

At the same time, factory orders in the US increased by 2% in June, significantly exceeding the estimates of economists who were expecting an increase but smaller, by 1.2%.

Of course, investors are still worried about inflation creeping in and are waiting for the latest labor market data due on Friday to see how much the surge in prices has affected employment and the economy.

And that’s because, according to the statements of Fed officials, the US federal bank is not expected to change its aggressive rate hike policy soon, as some investors had hoped, even though this tactic may lead to a recession in the US economy.

Indicators – statistics

Today’s positive investment climate was also reflected on the board, with the indices even accelerating their pace during the session to finally end the day with strong gains, led by the Nasdaq.

In particular, the Dow Jones ended the day at 32,812.50 points, with gains of 416.33 points or 1.29%, which is also its best performance in a week.

Strong gains of 1.56% were also recorded by the broader S&P 500, closing at 4,155.17 points, with the leading role today held by the technological Nasdaq, which jumped 2.59% or 320 points, closing at 12,668.16 points.

Of the 30 stocks in the blue chip index, only five posted losses, while all the rest closed in the green. The highest gains were recorded by Walt Disney (+4.12%), Apple (+3.82%) and Salesforce (+3.19%), while on the opposite side the worst performance was shown by Chevron shares (-2, 38%) and Walmart (-1.64%).

In individual stocks, PayPal jumped nearly 10% after late last night reported better-than-expected second-quarter results, but the company gave a mixed outlook for the full year.

Strong gains of over 11% were also recorded by the stock of Robinhood, which yesterday announced plans to reduce its staff by 23% citing the weak economic environment and limited trading activity.