U.S. stocks were slightly higher Wednesday as the rapid increase in the 10-year Treasury yield cooled, leading investors to buy some beaten-up tech stocks on the dip.
The Dow Jones Industrial Average rose 114 points, or 0.3%. The S&P 500 futures gained 0.4%, and the tech-heavy Nasdaq Composite was the early leader with a gain of 0.4%. On Tuesday, the Nasdaq Composite posted its worst day since March amid a spike in bond yields.
The 10-year Treasury Treasury yield eased slightly on Wednesday to trade right near 1.52%. The yield touched a high of 1.567% Tuesday.
Tech stocks led Tuesday's rout with Facebook, Microsoft and Alphabet losing more than 3%. Amazon fell more than 2%. Rising bond yields can hurt growth stocks, including tech stocks, because they lower the relative value of future earnings and can make the shares look overvalued.
But tech stocks were rebounding in Wednesday's early trading. Facebook, Amazon, Apple and Alphabet all rose. Zoom Video added more than 1%.
Shares of the semiconductor company Micron fell more than 3% after it reported earnings and revenue outlook for the first quarter of 2022 that missed consensus estimates.
"If interest rate increases moderate from here on the back of declining inflation expectations, then it wouldn't surprise me to see the market resume its march higher as we move into the fourth quarter," said Brian Price, head of investment management for Commonwealth Financial Network.
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