U.S. stocks rose in volatile trading Wednesday, a day after the Nasdaq Composite posted its worst daily loss since 2020, attempting to rebound from a tech-led sell-off in April.
The Nasdaq Composite gained 1%, after being down roughly 0.5% at its lows and touching a new 2022 low. The Dow Jones Industrial Average rose about 330 points, or 1%. The S&P 500 ticked up 1%.
Microsoft boosted the major averages after strong earnings results. Shares jumped more than 6% after a better-than-expected quarterly report and optimistic forward revenue guidance.
“We’re trying to find a place of stability,” Kari Firestone, chairman and CEO of Aureus Asset Management, told CNBC’s “Squawk Box.” “We need to see a few more names come in with really strong, reliable and sustainable earnings so investors can get back on board.”
Solar company Enphase Energy surged 13% and was the top gainer on the S&P 500 after an earnings beat.
Shares of Chinese companies also bounced back, dominating the Nasdaq’s leaderboard. Pinduoduo and JD.com both jumped more than 9%. Baidu gained more than 4%.
On the downside, Google parent Alphabet fell about 3% after the tech giant’s earnings results missed consensus estimates. Management warned on the conference call of another potentially weak quarter ahead.
Boeing also saw shares drop more than 12% after an earnings miss, the biggest laggard on the S&P 500 and the Dow.
Facebook parent Meta is set to report earnings Wednesday after the bell, with Apple and Amazon reporting earnings Thursday. Meta fell 2%, while Amazon was slightly lower and Apple was marginally higher.
Investors will be watching to see if tech companies’ results prove the intense selling in April has been misplaced.
“We remain cautious on rallies here,” BTIG’s Jonathan Krinsky said in a note to clients. “There still hasn’t been a full-scale washout, in our view, and trends remain to the downside. This means small rallies don’t do much other than alleviate short-term oversold conditions.”
The tech-heavy Nasdaq Composite is in bear market territory, sitting now roughly 22% below its high. The S&P 500 is more than 9% off its record and closed Tuesday below a key support level of 4200.
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In April, the S&P 500 is down more than 7%. The Nasdaq has lost about 12%. The Dow has declined around 4%.
“The confluence of persistent inflation, Fed tightening, the war in Ukraine, and China’s zero-Covid policy lockdowns has manifested in tenacious headwinds for investors in April,” Art Hogan, National Securities chief market strategist, said.
