Stocks rebounded Wednesday off the new bear market low as U.S. Treasury yields retreated from multi-year highs, and the British pound stabilized after the Bank of England announced a bond-buying plan.
The Dow Jones Industrial Average gained 213 points, or about 0.74%. The S&P 500 jumped 0.78%, one day after the index broke below the June intraday low. The Nasdaq Composite was up 0.58%.
The Bank of England said it would temporarily purchase long-dated UK government bonds in an effort to stabilize the plunging British pound. Sterling briefly popped on the news and was last trading 0.1% lower against the dollar at $1.0726.
The 10-year U.S. Treasury yield gave back its initial gains after the announcement, last trading at about 3.82%. Earlier in the trading session, the benchmark rate broke above 4% for the first time since 2008.
Elsewhere, shares of Apple were down nearly 4% after a Bloomberg report, citing people familiar with the matter, said the tech company is ditching plans to increase new iPhone production after demand fell short of expectations.
Wall Street is coming off a mixed session in which the S&P 500 reached a new bear market low of 3,623.29 and posted its sixth straight day of losses, while the Nasdaq Composite eked out a gain.
“I think that the market’s going to be pretty choppy, going to be sideways, until we… try and get a little bit more clarity on on where we are from an inflation peaking perspective,” said Megan Horneman, chief investment officer at Verdence Capital Advisors. “We’re kind of in a holding pattern until we get earnings season to kick off.”
Several technical metrics show that the stock market may be oversold, but some on Wall Street are worried that investors have not priced in an earnings slowdown and the impact of the Federal Reserve’s rate hikes. The S&P 500 breaking below its previous low is a key indicator for some that stocks still have further to fall.