Major U.S. indexes were moving higher Wednesday as stability in the bond trading translated into gains for stocks. Investors continue to look toward Washington, where President Joe Biden’s stimulus bill is nearly finalized.
The S&P 500 index rose 0.5% as of 10:55 a.m. Eastern. The Dow Jones Industrial Average )was up 1% and the technology-heavy Nasdaq rose 0.4% following a jump of 3.7% on Tuesday.
Energy companies were also among the biggest gainers, helped by 0.5% rise in the price of crude oil. Cabot Oil was up 4%, Marathon Oil rose 3% and Phillips 66 was up 2.5%. Bank stocks alro rose. The KBW Bank Index of the 24 largest banks climbed 1.7%.
Markets have benefited from bond trading being calmer in the last few days. The yield on the 10-year Treasury note was unchanged at 1.54% on Wednesday. That yield hit 1.60% late last week, which led to a sell-off in stocks.
Bond yields have been rising sharply over the past month due to rising expectations for growth and the inflation that could follow. The fall in bond prices drew investors who didn’t want to pay high prices for stocks, especially tech stocks that looked most expensive.
A measure on inflation released Wednesday was also helping the broader market. U.S. consumer prices increased 0.4% in February, the biggest increase in six months, however a closely watched measure called core inflation, which excludes food and energy prices, posted a much smaller 0.1% gain. That helped ease fears about inflation picking up.
Investors are betting the $1.9 trillion in coming government stimulus will help lift the U.S. economy out of its coronavirus-induced malaise. The package set for final approval in the U.S. House on Wednesday provides direct payments of up to $1,400 for most Americans and extends emergency unemployment benefits that help to support consumer spending, the economy’s main engine.
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