Nasdaq closes higher on Wednesday as stocks stabilize after heavy selling

The Nasdaq Composite Index rose in choppy trading on Wednesday as investors tried to find a foothold after the biggest one-day drop in more than two years.

The Nasdaq rose 0.74% to 11719.68. The S&P 500 rose 0.34% to close at 3,946.01. The Dow Jones Industrial Average rose 30.12 points, or 0.10%, to 31135.09 after dropping more than 200 points at session lows.

Moderna was one of the top performers on the Nasdaq, with a jump of more than 6%. Tesla is up 3.6%, and Apple is up 1%.

The modest gains followed a massive sell-off in shares on Tuesday. The Dow Jones fell more than 1,200 points, or nearly 4%, while the S&P 500 lost 4.3%. The Nasdaq Composite Index is down 5.2%. It was the largest one-day slide for all three averages since June 2020.

The decline started due to August CPI report, which showed headline inflation Up 0.1% m/m despite lower gas prices.

The heated inflation report has left questions about whether stocks will return to their June lows or fall further. It also raised some concerns that the Federal Reserve might do so Raising interest rates higher From 75 basis points are priced in the markets.

“Selling on Tuesday is a reminder that a continued rally will likely require clear evidence that inflation is on a downward trend. With macroeconomic and policy uncertainty rising, we expect markets to remain volatile in the coming months,” Mark Heffley, CIO at UBS Global Wealth Management said in a note to clients.

The breadth of the market was uneven on Wednesday, as declines in shares slightly outnumbered the S&P 500 gainers. Materials shares slid, leading to an 11% drop for Nucor.