US stocks rose on Wednesday, boosted by higher consumer confidence and better-than-expected earnings. Treasury yields were mixed following Tuesday's selloff, as the uproar over the Bank of Japan's unexpected increase in its yield trading band subsided.
The S&P 500 gained ground for the second day in a row, while the Nasdaq 100 gained the most since late November. Both indexes are still down the most for the year since 2008. The policy-sensitive two-year treasury yield fell four basis points on the day, while the benchmark 10-year yield remained relatively stable for the majority of the session.
FedEx and Nike reported earnings that exceeded Wall Street estimates on Wednesday, providing a reprieve for US stocks that had been battered since the Federal Reserve's hawkish turn last week. This week, investors did not hear from Fed speakers, which contributed to the so-called "Santa rally" in stocks. With a new roster of senior officials, the central bank's policymakers are expected to become incrementally more dovish in 2023.
On Wednesday, traders also analyzed new US data, which showed that the Fed's ongoing rate hikes are slowing the economy, but a recession is still possible. While sales of previously owned US homes fell for the tenth month in a row in November, US consumer confidence rose more than expected to its highest level since April as inflation eased.
