Stocks on Wall Street rose on Wednesday, recovering from a two-day slide that had been fueled by increasing oil prices and a bond market sell-off. The S&P 500 index saw a 0.5% increase, the Dow Jones Industrial Average climbed 0.5%, and the Nasdaq 100 gained 0.1%. This rebound was attributed to bargain hunting, with nearly 350 shares in the S&P 500 rising, and strong corporate earnings luring investors back into the market. Dell Technologies Inc. soared 14% following an optimistic outlook, while GitLab's shares jumped 13% after higher revenue guidance. Banks also experienced strong gains, with JPMorgan Chase rising 0.8% and Bank of America increasing 1.3%.
Oil prices remained elevated and volatile throughout the day, influenced by renewed military strikes between the U.S. and Iran, which raised concerns about global supply disruptions. West Texas Intermediate crude rose 0.7% to $90.85 a barrel, while Brent crude futures settled up 1% at $95.63 a barrel. The conflict, particularly the closing of the Strait of Hormuz, has led to a surge in gasoline prices and global shipping costs, exacerbating inflation that was already high due to a U.S. tariff war.
The bond market continued to show signs of expected borrowing cost increases. The yield on the 10-year Treasury rose slightly to 4.80% from 4.79% the previous day, marking a steady increase from 4.20% at the start of 2026. The 2-year Treasury yield held steady at 4.39%, significantly higher than its 3.50% level at the beginning of the year. Investors are closely monitoring economic data, with Friday's payrolls report and next week's inflation data being crucial in determining potential Federal Reserve actions.
Federal Reserve officials offered varying perspectives on interest rates. While Fed Bank of New York President John Williams suggested that easing inflation from tariff impacts and contained energy price increases might not necessitate a September hike, market expectations, according to CME FedWatch, still place a 64% chance on a rate increase at the upcoming meeting. The Fed's Beige Book survey indicated modest economic activity growth over the past two months, particularly driven by data centers, and the labor market showed a moderate pace of job additions in August, with an historically low unemployment rate consistent with full employment.
