Wall Street rebounds after 4 days as bond yields ease, AI stocks surge

All three major US stock indexes rebounded Wednesday after a four-session losing streak, as Treasury yields pulled back from intraday highs and AI-related shares rallied. The 10-year Treasury yield briefly surpassed 4.8% before retreating, helping restore investor confidence.

The Dow Jones Industrial Average closed up 295.07 points, or 0.56 percent, at 53,061.95 on the New York Stock Exchange. The S&P 500 rose 35.13 points, or 0.46 percent, to 7,666.60, while the Nasdaq Composite gained 118.06 points, or 0.45 percent, to close at 26,217.83. The gains snapped a three-session losing streak for all three indexes.

Bargain hunters moved in as the sharp rise in Treasury yields that had weighed on equities showed signs of easing. The 10-year yield climbed as high as 4.821% during the session — its highest level since November 2023 — before giving back most of its gains to stand at 4.793%, down 0.2 basis points from the previous session, as of 3 p.m. local time. The 30-year yield was unchanged at 5.266%, while the 2-year yield fell 0.8 basis points to 4.383%.

Strength in AI-related shares also drove the rebound. Dell Technologies surged 15.81% after raising its annual sales and profit outlook on the back of growing demand for AI servers. Nvidia climbed 3.21%, while Micron and Qualcomm rose 2.43% and 2.01%, respectively. SK hynix's American depositary receipts also gained 2.61%.

Markets were also focused on the Federal Reserve's future monetary policy direction. New York Fed President John Williams told CNBC that the path ahead "remains to be seen," adding that there are "no clear signals" indicating whether current policy is sufficient or whether additional action is needed.

Williams said evidence is emerging that inflation is easing, as the impact of tariffs diminishes and rising energy prices have not spread to other service sectors.

The Fed's Beige Book, released Wednesday, showed the US economy maintained modest growth over the past two months, driven in part by demand for data centers.

However, rising oil prices stemming from US-Iran tensions remained a headwind for stocks. Supply disruption concerns pushed crude higher for a third consecutive session. November Brent crude futures settled up 1.04 percent at $95.63 a barrel, while October West Texas Intermediate futures rose 0.88 percent to $91.01 a barrel.

"The market is finding some stability," said Angelo Kourkafas, investment strategist at Edward Jones. "The underlying fundamentals are still positive."