The Nasdaq Composite ground higher in choppy trading on Wednesday as investors tried to find their footing after the biggest one-day drop in more than two years.
The Nasdaq rose 0.74% to 11,719.68. The S&P 500 added 0.34% to close at 3,946.01. The Dow Jones Industrial Average inched up 30.12 points, or 0.10%, to 31,135.09 after being down more than 200 points at session lows.
Moderna was one of the top performers in the Nasdaq, jumping more than 6%. Tesla rose 3.6%, and Apple tacked on 1%.
The modest gains followed a massive sell-off for stocks on Tuesday. The Dow sank more than 1,200 points, or nearly 4%, while the S&P 500 lost 4.3%. The Nasdaq Composite dropped 5.2%. It was the biggest one-day slide for all three averages since June 2020.
The drop was sparked by August’s consumer price index report, which showed headline inflation rising 0.1% on a monthly basis despite a drop in gas prices.
The hot inflation report left questions over whether stocks could go back to their June lows or fall even further. It also spurred some fears that the Federal Reserve could hike interest rates even higher than the 75 basis points markets are pricing in.
“Tuesday’s selloff is a reminder that a sustained rally is likely to require clear evidence that inflation is on a downward trend. With macroeconomic and policy uncertainty elevated, we expect markets to remain volatile in the months ahead,” Mark Haefele, CIO of UBS Global Wealth Management, said in a note to clients.
Market breadth was mixed on Wednesday, with declining stocks slightly outnumbering gainers in the S&P 500. Materials stocks slid, led to the downside by an 11% drop for Nucor.