U.S. equity indexes demonstrated notable gains across the board, primarily driven by the energy and utilities sectors, while government bond yields experienced an upward trend after midday on Wednesday. The Nasdaq Composite saw a significant increase of 1.1%, closing at 16,540.2 points, while the S&P 500 rose by 0.9% to reach 5,288.5 points.
The Dow Jones Industrial Average also posted gains, climbing 0.6% to 39,225.9 points. This encouraging momentum is a continuation of recovery efforts following a sharp market sell-off earlier in the week on Monday. Notably, all market sectors recorded intraday gains, with the exception of the health care sector.
The CBOE's Volatility Index (VIX), often referred to as the fear gauge of the market, saw a significant decline of 12.3%, settling at 24.4. This decrease follows a troubling spike above 50 earlier in the week, which raised concerns about a potential economic slowdown in the United States. The anxiety in the markets was primarily spurred by disappointing July nonfarm payrolls data; however, as the day progressed, those concerns appeared to be diminishing.
This shift is evident as the probability of a significant 50 basis point cut in interest rates dropped to 64% by Wednesday afternoon, a stark contrast to the over 90% likelihood observed on Monday. Treasury yields experienced a substantial uptick during the day, with the 10-year note rising 5.1 basis points to reach 3.94%, and the two-year yield increasing 3.9 basis points to 4.02%.
This trend indicates a shift away from risk-off sentiment that had previously dominated the investor mindset. In corporate news, notable earnings reports came into focus. Fortinet ($FTNT), a cybersecurity firm, reported its second-quarter adjusted earnings and sales that exceeded market expectations, subsequently raising its full-year guidance for 2024.
This positive news sent Fortinet's shares skyrocketing, achieving an impressive increase of nearly 27% intraday, marking it as the standout gainer on both the S&P 500 and the Nasdaq. Conversely, Super Micro Computer ($SMCI) faced challenges as its shares plummeted by 16.8%, marking it as the worst performer of the day on both indices after reporting fiscal Q4 adjusted profit that fell short of analysts' forecasts.
In the commodities market, West Texas Intermediate crude oil ascended by 3.1%, with prices reaching $75.44 per barrel. Overall, the day reflects an optimistic outlook as investors regain confidence following earlier economic apprehensions, significantly impacting trading dynamics across the U.S. equity market..