U.S. stocks ticked higher Wednesday as investors awaited economic data and a second day of congressional testimony by Federal Reserve Chairman Jerome Powell.
The S&P 500 edged up 0.2%, following a rally of over 1% on Tuesday. The technology-heavy Nasdaq Composite Index fell 0.3%. The Dow Jones Industrial Average rose 0.6%, or 165 points.
Stocks have whipsawed this week: the S&P 500 on Monday briefly neared correction territory—defined as a retreat of 10% from a recent high—only to rebound on Tuesday. Investors are contending with the risk of a fresh wave of coronavirus in Europe as well as case levels that remain elevated in the U.S. Signs that authorities are likely to be more restrained in their efforts toward curtailing the spread to avoid dealing further blows to the global economy have cheered some investors.
“Markets are really changing very rapidly their mindset,” said Nadège Dufossé, deputy global head of multiasset at Candriam, an asset manager based in Luxembourg. Stocks are unlikely to resume their relentless advance, but also may not lurch downward because of the Fed’s continued support to the economy, she said. “At the end of the day, you have a floor for markets and we will not go back, probably, to March lows.”
Resurgent coronavirus cases were pinching service providers in Europe and Asia, according to surveys of purchasing managers in Germany, France and Japan. The reports by data firm IHS Markit indicated a faltering end to the third quarter for the global economy, though the manufacturing sector remained a bright spot. The data suggested output may struggle to return to pre-pandemic levels until a vaccine becomes widely available.