Stocks Rise on Wall Street, Erasing Much of Their Loss from a Day Earlier

💡 US stocks erased most of their losses from the previous day, as investors reassessed the economic outlook.

The US stock market posted a strong rebound on Wednesday, erasing most of the losses from the previous day. The S&P 500 index jumped 2.4%, while the Dow Jones Industrial Average soared 2.7%. The tech-heavy Nasdaq Composite also surged 3.1%.

Stock Market Rebound

The rebound was driven by a combination of factors, including a surprise decline in inflation data and a stronger-than-expected economic growth report. The Labor Department reported that the Consumer Price Index (CPI) rose 7.7% in May, which was lower than the expected 8.1%.

The 10-year Treasury yield fell to 3.4%, its lowest level in over a month, as bond traders reassessed the economic outlook. $TLT, which tracks Treasury bond prices, rose 3.5% in response to the yield decline.

Economic Growth Report

The Commerce Department reported that the US economy grew at a 4.8% annual rate in the first quarter, which was stronger than the expected 4.2%. The report showed that consumer spending and business investment were the main drivers of growth.

Inflation Data

The Labor Department reported that the Consumer Price Index (CPI) rose 7.7% in May, which was lower than the expected 8.1%. The core CPI, which excludes food and energy prices, rose 5.5%, which was also lower than expected.

What It Means for Investors