By Yasin Ebrahim
Investing.com – The S&P 500 renewed its bid for a record high Wednesday, as a rebound in big tech and chip stocks from weakness a day earlier and data pointing to underlying strength in the economic recovery lifted investor sentiment.
The S&P 500 gained 1.3%, and is just short of its closing high of 3,386.15 and intraday high of 3,393.52 seen on Feb. 19. The Dow Jones Industrial Average rose 0.68%, or 188 points, and the Nasdaq Composite jumped 2%.
In a sign the economic recovery continues to hum along, the pace of inflation continues to gather pace on the back of rising energy prices.
"The 0.6% month-on-month/m increase in July core CPI was jaw dropping," Jefferies (NYSE:JEF) said in a note. "It was the largest sequential jump since January 1991. While this momentum in pricing is unlikely to be sustained, the strength was broad-based and cannot be ignored."
But lingering worries remained that the recovery will come under threat if lawmakers are unable to resolve their differences and make progress on stimulus talks, which hit a stalemate.
House Speaker Nancy Pelosi said on Wednesday that Democrats and the Trump administration were "mile apart" on any agreement over additional fiscal stimulus.
The move higher in the broader market was sparked by a rally in the Fab 5 and chip stocks.
Apple (NASDAQ:AAPL), Amazon.com (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), Facebook (NASDAQ:FB) and Alphabet (NASDAQ:GOOGL) the so-called Fab 5, which make up about 25% of S&P 500, were up more than 1%.
Advanced Micro Devices (NASDAQ:AMD) jumped 7%, while NVIDIA (NASDAQ:NVDA) and Qualcomm (NASDAQ:QCOM) rose 5%.
Energy also chipped in with gains as oil prices advanced after government data showed weekly U.S. crude inventories fell by a more than expected 4.5 million barrels, easing investor concerns about fragile demand.
In health care, Moderna (NASDAQ:MRNA) was flat after securing a $1.5 billion contract from the Trump administration to provide 100 million doses of its coronavirus vaccine candidate, mRNA-127.
On the earnings front, Lemonade reported its maiden quarterly earnings report, but better-than-expected results were offset by guidance that fell short of Wall Street estimates, sending its shares down nearly 3%.
In other news, Tesla (NASDAQ:TSLA) was up 10% after it declared a five-for-one stock split, effective Aug. 27. The move is aimed at lowering the price of Tesla stock to make it more affordable for retail investors.
Uber Technologies (NYSE:UBER) was flat after its CEO Dara Khosrowshahi warned the ride-hailing company would have to shut down the Uber app temporarily should it fail to overturn a California judge's decision requiring it to classify Uber drivers as employees rather than independent contractors.