Investing.com – The S&P 500 climbed Wednesday, as a rally in Facebook-parent Meta helped the broader tech sector build on recent gains just as Treasury yields paused their run higher.
Meta jumped more than 5% as investors appeared to the buy the dip in the social media company, which hit fresh 52-week lows a day earlier.
For the second-straight day, a rally in semiconductor stocks also pushed tech higher, with Nvidia (NASDAQ:NVDA) racking up a 5% gain as analysts downplayed the $1.25 billion hit to the company after its deal to acquire UK chipmaker ARM fell through.
“The $1.25bn prepay represents ~30 days of NVDA free cash flow – and we see no impact to the core business and trends – and we would not be surprised to see an accelerated timeline for NVDA’s ARM CPU called Grace which was originally scheduled for sampling in CY22 and shipments in CY23,” Credit Suisse said in a note as it kept its outperforming and $400 price target on the stock.
A retreat in U.S. bond yields also supported sentiment on growth sectors of the market like tech. The U.S. 10-year yield took a breather from attempting to top 2% for the first time in more than two years, but it is expected to breech that milestone this year.
“The TNX’s (10-year Treasury yield) recent rally above the 1.80% zone sets up a bullish signal to test the potential target range of 2.00-2.20% in 2022,” Janney Montgomery Scott said in a note.
U.S. government bond yields, which have been buoyed by expectations for more aggressive action, will remain in the spotlight as data due Thursday is expected to show inflation remains elevated.
On the quarterly earnings front, investors continued to digest mostly bullish results
Chipotle (NYSE:CMG) reported better-than-expected results after the burrito chain move to hike menu prices offset the impact of inflation, sending its shares more than 10% higher.
Yum Brands reported fourth quarter earnings that fell short of estimates, as higher costs weighed on margins at Taco Bell, KFC and Pizza Hut. Its shares was up 2%.
LYFT (NASDAQ:LYFT) rose more nearly 6% after reporting a beat on both the top and bottom lines, though a miss on active riders first-quarter guided that fell short of estimates kept a lid on gains.