The Dow Jones Industrial Average rose on Wednesday as investors turned back to economically sensitive sectors on bets that the US economy will continue to recover.
The index of blue chip stocks added about 260 points, or 0.8%, during recent trading, while companies ranging from American Express to Chevron to Caterpillar each climbed 2.5% or more. The S&P 500 added 0.4%, on track to recoup some of the losses it took on Tuesday.
However, the Nasdaq Composite fell and losses accelerated during afternoon trading. The technology-heavy index recently dropped 0.7%.
Markets faltered this week as investors continued to assess the implications of a recent rise in bond yields, which, despite a slight drop this week, surpassed 1.7% this month for the first time in more than a year. Money managers are also assessing stock valuations after major indices are up more than 70% since the pandemic-fueled route last March.
“We’ve been on this rally for a year now: we’ve seen a massive drop and a massive rally, and I feel like the markets are about to pause from here,” said Brian O’Reilly, head of market strategy for Mediolanum International Funds. “Profits will be much more difficult to achieve for the rest of the year.”