U.S. stocks recovered Wednesday after three consecutive losing sessions, as Treasury yields eased from multiyear highs and investors returned to parts of the market that had been hit hardest by the recent selloff.
The Dow Jones Industrial Average climbed 295 points, or 0.56%, to 53,061.95. The S&P 500 gained 0.46% to 7,666.60, while the Nasdaq Composite rose 0.45% to 26,217.83. Small-cap stocks outperformed, with the Russell 2000 advancing about 1.1%.
The rebound provided some relief after Tuesday’s sharp decline, when rising oil prices, escalating U.S.-Iran tensions and another global bond selloff pushed the Dow down more than 400 points. The S&P 500 lost 0.7% Tuesday and the Nasdaq fell just over 1%, marking a third straight losing session for the major indexes.
Those pressures have not disappeared. Instead, Wednesday’s trading showed investors were willing to buy selected stocks even as oil remained around $90 a barrel and Treasury yields stayed historically elevated.
The 10-year Treasury yield briefly reached 4.818% Wednesday, its highest level since November 2023, while the 2-year yield touched 4.41%, its highest since January 2025. Both pulled back from their session highs later in the day, giving stocks some breathing room.
Higher bond yields have become one of the market’s most important risks because they raise borrowing costs throughout the economy and reduce the relative appeal of expensive growth stocks. Thierry Wizman, global foreign exchange and rates strategist at Macquarie Group, described the problem earlier in the week by saying, “Higher yields are proving to be the stock market’s undoing.”
The pressure has been particularly important for technology companies whose valuations depend heavily on expectations for earnings several years into the future. Higher rates reduce the present value investors are willing to assign to those future profits.
Oil remains another source of uncertainty.
West Texas Intermediate crude traded near $91 per barrel after renewed military exchanges between the United States and Iran pushed prices sharply higher earlier in the week. The conflict has brought fresh attention to the Strait of Hormuz and the possibility that disruptions to energy supplies could keep inflation elevated.
That creates a difficult combination for markets: slower hiring could argue against additional Federal Reserve tightening, while higher energy prices could make inflation harder to control.
Weak ADP Jobs Report Adds Another Complication for the Fed
Fresh labor-market data Wednesday showed private-sector hiring losing momentum.
Private employers added 38,000 jobs in August, according to ADP, below the 47,000 increase economists surveyed by Bloomberg had expected. July’s gain was revised upward to 46,000 from an initially reported 44,000.
August represented the weakest month for private-sector job creation since January.
The weakness was not evenly distributed. Education and health services added 45,000 jobs and leisure and hospitality added 16,000, while manufacturing shed 17,000 positions and professional and business services lost 16,000.
Goods-producing employers collectively cut 10,000 jobs, while service-sector employment increased by 48,000.
Wage growth also continued to cool. Base pay increased 3.0% from a year earlier for workers who remained in their jobs, while workers who changed jobs recorded 4.7% growth.
The softer hiring numbers arrive just days before Friday’s more closely watched government employment report and shortly before the Federal Reserve’s September policy meeting.
Markets have recently moved toward expecting another Fed rate increase after persistent inflation, higher energy prices and hawkish signals from policymakers. That makes upcoming employment and inflation data unusually important: strong economic numbers could reinforce expectations that rates stay higher, while a meaningful deterioration in hiring could complicate the case for additional tightening.
The Federal Reserve’s Beige Book offered a similarly mixed picture Wednesday.
Economic activity increased modestly since early July, with 10 of the Fed’s 12 districts reporting slight-to-moderate growth. Employment rose only very slightly nationwide, while wage growth remained modest to moderate.
Price pressures, however, remained persistent. Eight districts reported moderate price increases, and businesses continued to report higher costs for energy, transportation, metals and petrochemicals. The Fed also noted that consumers were becoming increasingly sensitive to higher prices, limiting some companies’ ability to pass rising costs along to customers.
Manufacturing was one of the stronger areas, particularly for businesses tied to defense spending and data-center construction.
That combination helps explain why the bond market remains uneasy. The economy is still expanding, AI and infrastructure investment remain strong, and inflation pressures have not disappeared, even as employment growth shows signs of weakening.
Dell Becomes One of Wednesday’s Biggest Winners
Dell Technologies provided one of the clearest sources of strength in the stock market, surging nearly 16% after delivering earnings and guidance far above Wall Street expectations.
The company reported fiscal second-quarter adjusted earnings of $7.04 per share compared with the approximately $4.91 analysts expected. Revenue jumped 58% from a year earlier to $46.97 billion, also ahead of the roughly $44.9 billion consensus estimate.
AI infrastructure was the standout.
Dell booked a record $60.9 billion of AI server orders during the quarter, generated $16.4 billion in AI-optimized server revenue and finished the period with a record $95 billion AI server backlog.
Infrastructure Solutions Group revenue surged 89% to $31.8 billion, while traditional server and networking revenue more than doubled. Dell’s Client Solutions Group, which includes its PC business, grew revenue 20% to $15 billion.
Management responded by dramatically increasing its fiscal 2027 outlook. Dell now expects approximately $192 billion in full-year revenue, up from its prior forecast of $167 billion, while its adjusted EPS forecast increased to $25.50 from $17.90.
The company also lifted its expected full-year AI-optimized server revenue to $74 billion from $60 billion.
Dell’s rally helped reinforce a broader point about the current market: investors have not abandoned the AI investment theme, but they are becoming more selective about which companies can translate spending into measurable revenue, orders and profits.
Nvidia rose about 3.2% Wednesday, while Micron gained roughly 2.4% and Qualcomm advanced about 2%, helping semiconductor stocks recover after recent weakness.
The prior evening’s earnings reactions also showed how demanding investors remain.
MongoDB initially dropped about 12% despite beating second-quarter expectations and issuing upbeat guidance. The company reported adjusted earnings of $1.90 per share on $772 million in revenue, compared with expectations of $1.61 per share and $734 million.
Credo Technology also slipped after reporting a non-GAAP gross margin of 68%, slightly below the roughly 68.3% analysts expected, even though the connectivity-chip company exceeded expectations on its headline quarterly results.
That split between Dell’s powerful rally and declines elsewhere in technology reflects a market increasingly focused on execution rather than simply rewarding companies for having exposure to AI.
Market Breadth Improves, but Risks Remain
Wednesday’s advance extended beyond a handful of megacap stocks.
Advancing companies outnumbered decliners by roughly 1.8-to-1 on both the New York Stock Exchange and Nasdaq. Regional banks, airlines, precious-metals miners and semiconductor stocks were among the stronger areas of the session.
Software and services stocks remained weaker, partly as investors continued debating which companies could face disruption as artificial intelligence becomes more capable.
Despite the rebound, Wednesday did not fully reverse the damage from the previous three sessions. Treasury yields remain elevated, oil prices remain vulnerable to additional Middle East escalation, and markets are still reassessing how high interest rates may need to remain.
The next several sessions could provide clearer direction.
Investors will be watching Thursday’s jobless claims, international trade data, productivity figures and services-sector readings before Friday’s August employment report. Friday’s payroll figures will provide a broader look at hiring than the ADP report and could materially shift expectations for the Federal Reserve’s September 15-16 policy meeting.
Corporate earnings remain important as well. Broadcom, Snowflake and Hewlett Packard Enterprise were scheduled to report after Wednesday’s close, providing another test of investor expectations surrounding AI infrastructure, cloud computing and enterprise technology spending.
For now, Wall Street has broken its three-day losing streak. Whether that turns into a more durable recovery will depend less on Wednesday’s bounce and more on whether Treasury yields stabilize, oil stops pushing inflation expectations higher and incoming economic data gives investors a clearer picture of what the Fed may do next.