Stocks turn higher as Big Tech, banks catch bids

U.S. stocks rose, erasing declines, as investors weighed prospects for economic growth and corporate earnings amid expectations of monetary tightening.

U.S. stocks rose, erasing declines, as investors weighed prospects for economic growth and corporate earnings amid expectations of monetary tightening.

The S&P 500 turned higher as financials, tech and industrials caught bids. The Nasdaq 100 rose, led by gains in Apple Inc. and Microsoft Corp. The Dow Jones Industrial Average outperformed major benchmarks. Pfizer Inc. declined after its 2022 revenue forecast missed estimates.

The 10-year Treasury yield climbed toward 1.97 per cent, a level last seen in 2019, with some investors betting it’s heading for 3 per cent this year as the Federal Reserve battles red-hot inflation. The dollar edged higher against a basket of peers.

Investors are awaiting data Thursday expected to show stubbornly high U.S. inflation. That could inject further volatility into financial markets bracing for a Federal Reserve cycle of rate hikes and eventual balance-sheet reduction. But the rise in yields could also support some equities, like banks and value stocks, according to Goldman Sachs Group Inc., amid generally solid earnings.

“Markets will get used to the tightening regime at some point,” Chris Iggo, chief investment officer, core investments at AXA Investment Managers, wrote in a note. “The growth and earnings forecast revisions in the next few months will be key.”