U.S. stocks ended the day sharply higher, reversing two days of declines, as geopolitical worries faded, oil fell and attention focused on employment data due at the end of the week.
The S&P 500 rose 64 points, or 1.6%, to 4,155. The Dow Industrials gained 416 points, or 1.3%, to 32,813. The tech-heavy Nasdaq surged 319 points, or 2.6%, to 12,668.
Oil fell to $91 a barrel as Saudi Arabia and OPEC moved to increase production modestly following President Joe Biden's recent visit to the Middle East. China pledged to conduct live-fire military exercises off the coasts of Taiwan in response to House Speaker Nancy Pelosi's visit. China claims Taiwan, home to much of the world's computer chip manufacturing, as a runaway province. Pelosi is the highest ranking U.S. official to visit Taiwan since the 1990s.
Updated at 3:25 p.m. ET
Stocks rose sharply in afternoon trading as investors shrugged off geopolitical worries over House Speaker Nancy Pelosi's visit to Taiwan, which has enraged mainland China's leaders and prompted threats of military responses.
The S&P 500 rose 68 points, or 1.7%, to 4,159 in late trading. The Dow Industrials gained 448 points, or 1.4%, to 32,844. The tech-heavy Nasdaq surged 318 points, or 2.6%, to 12,667.
Scores of earnings reports are due after the bell on one of the busiest days of earnings season. They include Allstate (ALL), Sturm Ruger & Co. (RGR) and Marathon Oil (MRO).
Updated at 10:53 a.m. ET
Stocks were rising on Wednesday following two consecutive trading days of losses as investors looked past House Speaker Nanci Pelosi’s contentious visit to Taiwan and awaited key economic data.
The Dow Jones Industrial Average was 0.69%, or 222 points higher, while S&P 500 increased 0.85% and Nasdaq 100 rose 1.49% at last check. The yield on the benchmark 10-year Treasury note moved higher to 2.81% at last check as investors assessed Pelosi’s controversial Asia trip and looked ahead to Friday’s jobs report.
Oil prices fell about 1.8% at last check in early trade on Wednesday, reversing gains from the previous session ahead of a meeting OPEC+ producers that will determine how much global supply will be released going into the fall.
Pelosi met Taiwan President Tsai Ing-wen on Wednesday in Taipei, where Tsai thanked Pelosi for her support of democratic values and said she was committed to working with the U.S. over security in the Taiwan straits.
Beijing, which claims Taiwan as part of its territory, had warned Pelosi and the U.S. administration not to set foot there, with Chinese officials threatening unspecified military countermeasures in response to her visit.
Taiwan is a democratic self-ruled island that China sees as a runaway province. Beijing has been vocal about its opposition to Pelosi’s trip.
On the economic data front, investors this week are awaiting the July nonfarm payrolls report slated for release Friday for further clues into the state of the economy and the job market. Analysts polled by FactSet are expecting 250,000 new jobs were added to the economy last month following June's 372,000 gain.
Before then, Services PMIs data and factory orders will be released Wednesday morning. Both data points will be important for investors as they track the slowdown of the U.S. economy.
Among specific stocks, Robinhood (HOOD) shares ended up 11.7% to $10.31 each at last check after the company said it is slashing nearly a quarter of its full-time staff, the second round of layoffs this year.
The online brokerage once synonymous with meme stock trading and other high-risk retail bets on stocks said it will cut some 23% of its workforce as it continues to reel from a sharp slowdown in trading activity.
The layoffs come alongside a broader company reorganization, Vlad Tenev, Robinhood’s chief executive, said in a message posted to the company’s blog. In the statement, Tenev said the previous round of layoffs in April “did not go far enough” in helping the company cut costs.
Starbucks (SBUX) shares ended up 4.3% at $87.27 after the coffee-chain giant said U.S. customer demand remains strong, despite higher spending on labor and inflationary pressures weighing on costs.
The Seattle-based company said global same-store sales for the three months ended July 3 were up 3% from the same period last year. U.S. same-store sales increased 9%, while those in the chain’s China market plunged 44% amid the country’s renewed Covid-19 related shutdowns and other restrictions during the period.
However, the gains were offset by increased employee wages and training as well as costs for ingredients, which hurt store-level profit for the period – even as higher prices partially offset the costs. Starbucks said prices are around 5% higher compared with a year ago.
Airbnb (ABNB) shares, meanwhile, ended down 1.13% at $115.02 as a weaker-than-expected outlook overshadowed otherwise strong quarterly results.
The San Francisco-based company posted $2.1 billion in revenue in the three months through June, up 58% from the same period last year as people continued to book suburban rentals despite hosts raising prices.
Airbnb reported a profit of $379 million in the period, topping analysts’ projections for a profit of $295 million and compared with a loss in the year-earlier quarter.
More earnings data is due out Wednesday with reports from CVS Health (CVS), Yum! Brands (YUM), MGM Resorts (MGM) and eBay (EBAY).
Alibaba (BABAF) , Eli Lilly (LLY), Warner Bros. Discovery (WBD), Amgen (AMGN) and Block (SQ) will release their second-quarter numbers on Thursday.
