U.S. stocks were higher in afternoon trading on Wednesday, with the Nasdaq and S&P 500 up more than 1% each as upbeat outlooks from Micron Technology and other companies eased some worries about the economy.
The memory chip maker late Tuesday forecast a drop in third-quarter revenue in line with Wall Street expectations, while it gave a rosy outlook for 2025 with artificial intelligence boosting sales.
“We had a couple of good reads into the economy from a couple of companies,” said King Lip, chief investment strategist at BakerAvenue Wealth Management in San Francisco.
“The big one is Micron Technologies. Micron is sort of a microcosm of the global economy because their chips go into so many different industries and sectors. If they are optimistic about things in terms of orders, that means the overall economy is doing well.”
The bulk of S&P 500 companies begin reporting on the first quarter after mid-April.
Investors are also trying to gauge whether turmoil in the banking system may be subsiding, and what that may mean for Federal Reserve policy.
The Dow Jones Industrial Average (.DJI) rose 230.8 points, or 0.71%, to 32,625.05, the S&P 500 (.SPX) gained 44.33 points, or 1.12%, to 4,015.6 and the Nasdaq Composite (.IXIC) added 173.97 points, or 1.48%, to 11,890.05.
The banking turmoil, which started earlier in March with the collapse of Silicon Valley Bank, caused a swift selloff in the sector shares and fueled jitters about the strength of the economy.
The Fed has been raising interest rates to control inflation.
Personal Consumption Expenditures data on Friday is the next key U.S. economic report.
Fed funds futures traders are now pricing in a 47% chance of a 25 basis points increase in May, after seeing it as a long shot late last week.
The CBoe volatility index (.VIX), Wall Street’s fear gauge, fell to its lowest since March 9, reflecting easing investor anxiety.
Advancing issues outnumbered declining ones on the NYSE by a 3.47-to-1 ratio; on Nasdaq, a 1.84-to-1 ratio favored advancers.
The S&P 500 posted 9 new 52-week highs and no new lows; the Nasdaq Composite recorded 57 new highs and 113 new lows.