The Nasdaq Composite soared in choppy trading on Wednesday as investors struggled to find their footing after the biggest one-day decline in more than two years.
The Nasdaq rose 0.74% to 11,719.68. The S&P 500 added 0.34% to close at 3,946.01. The Dow Jones Industrial Average edged up 30.12 points, or 0.10%, to 31,135.09 after losing more than 200 points to the session low.
Moderna was one of the best performers on the Nasdaq, jumping more than 6%. Tesla rose 3.6% and Apple rose 1%.
The modest gains followed a sell-off in stocks on Tuesday. The Dow Jones lost more than 1,200 points, or almost 4%, while the S&P 500 lost 4.3%. The Nasdaq Composite fell 5.2%. It was the biggest one-day drop for all three averages since June 2020.
The fall was triggered by The August Consumer Price Index report, which showed headline inflation up 0.1% on a monthly basis despite lower gasoline prices.
The hot inflation report left questions over whether stocks could return to their June lows or fall even further. It also sparked some fears that the Federal Reserve could raise interest rates further than market prices by 75 basis points.
“Tuesday’s selloff reminds us that a sustained recovery will likely require clear evidence that inflation is on a downtrend. With macroeconomic and political uncertainty elevated, we expect markets to remain volatile in coming months,” said Mark Haefele, CIO of UBS Global. Wealth Management, said in a note to clients.
The breadth of the market was mixed on Wednesday, with falling stocks slightly outpacing the S&P 500 gainers. Materials stocks slid, dragging Nucor down 11%.