The Nasdaq has led Wall Street higher as megacap growth and technology stocks gain and US Treasury yields decline amid growing investor speculation that the Federal Reserve will temper its aggressive rate hike path.
New orders for US-manufactured goods remained unchanged in August as expected while US job openings, a measure of labor demand, fell by the most in nearly two and a half years in August.
Following the economic data, yields on government bonds dipped for a second day on hopes of moderation in monetary policy even though San Francisco Federal Reserve Bank President Mary Daly said the US central bank needs to deliver further interest rate hikes.
“Job openings data coming in lower than expected points to a weakening labor market. If confirmed by the non-farm payrolls report on Friday it could give the Fed the cover to slow down its tightening,” said Thomas Hayes, chairman and managing member of New York-based Great Hill Capital.
“The market loves to see that (weakness in yields and US dollar) and it sets up well going into earnings season with expectations so low at 3.2 percent earnings growth.”
The yields on the 10-year US Treasury fell to near two-week lows, lifting rate-sensitive tech and tech-adjacent stocks.
Megacap market leaders such as Apple Inc, Microsoft Corp, Alphabet Inc and Nvidia Corp rose between 2.37 percent and 4.30 percent while the Philadelphia SE Semiconductor index climbed 4.12 percent.
Consumer discretionary sector led gains among the 11 S&P 500 sectors, rising more than 4.0 per cent.
In early trading, the Dow Jones Industrial Average was up 714.23 points, or 2.42 per cent, at 30,205.12, the S&P 500 was up 100.15 points, or 2.72 per cent, at 3,778.58, and the Nasdaq Composite was up 347.73 points, or 3.22 per cent, at 11,163.17.
Banks such as Wells Fargo & Co, JPMorgan Chase & Co and Bank of America Corp added more than 3.0 per cent each.
The rebound in stocks on the first trading day of the final quarter follows the S&P 500’s lowest close in nearly two years on Friday that capped its worst monthly performance since March 2020.
Investors will keep a close watch on comments from Fed speakers including New York President John Williams, Cleveland President Loretta Mester and Governor Philip Jefferson.
Rivian Automotive Inc jumped 8.4 percent after the electric-vehicle maker said it produced 7,363 units in the third quarter, 67 percent higher than the preceding quarter, and maintained its full-year target of 25,000.
Tesla Inc bounced back 4.5 percent from its steepest sell-off in four months in the previous session that was triggered by disappointing quarterly vehicle deliveries.
Advancing issues outnumbered decliners by a 13.59-to-1 ratio on the NYSE and a 6.70-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and no new lows while the Nasdaq recorded 33 new highs and 31 new lows.
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