US stocks experienced a notable rebound on Thursday, with Big Tech stocks leading the charge following a sell-off triggered by an unexpected increase in consumer prices the day before. The tech-heavy Nasdaq Composite saw the most significant gains, rising by approximately 1.7%. The S&P 500 also climbed by about 0.7%, recovering from a recent slump that saw major indexes drop. The Dow Jones Industrial Average had a more modest performance, closing just below the flatline.
In the midst of this recovery, the 10-year Treasury yield steadied around 4.56% after spiking to its highest level since November in the previous session.
Tech giants Apple and Nvidia were among the leaders of the market rally, with both stocks surging by more than 4%. Amazon also saw gains of over 1.5%, reaching a record high not seen since 2021.
On the inflation front, investors received slightly better news on Thursday, as the Producer Price Index for March showed a 0.2% increase from the previous month, lower than economists had predicted. The year-over-year growth rate of 2.1% also fell below expectations, although it still marked the fastest rise in producer prices in nearly a year.
The recent surge in bond yields and subsequent pullback in stocks was prompted by a stronger-than-expected March Consumer Price Index report, leading investors to reassess their expectations for Federal Reserve policy. The market is now anticipating just two rate cuts in 2024, later in the year than previously forecasted.
Looking ahead, investors are hopeful that first-quarter corporate earnings reports can provide further momentum to stocks, especially amid limited signs that high borrowing costs are impacting earnings. Quarterly updates from major banks, including JPMorgan, are expected to kick off the earnings season on Friday.