Stocks rose slightly in choppy trade Wednesday Wall Street tried to build on the strong gains set in the previous session.
The Dow Jones industrial average rose 100 points after opening 127 points lower. The S&P 500 rose 0.2 percent, with consumer discretionary as the best-performing sector. The Nasdaq composite declined 0.1 percent.
The latest moves come after three volatile sessions in which fear of rising inflation sent interest rates higher, pressuring equities. Traders also blamed computerized trading and sharp moves in obscure volatility funds that use leverage for the market’s recent swings.
“I think this bull market is basically in the process of forming a top,” Ruchir Sharma, chief global strategist at Morgan Stanley Investment Management, told CNBC’s “Squawk Box” on Wednesday. “This is the first crack of it.”
“Bull-market tops tend to be a process, not an event,” he said. “The reason why this is likely to play out this year is the trifecta which has been driving global stocks over the last 12-to-18 months as a big tailwind is now bound to turn into a headwind.” The trifecta Sharma refers to is better-than-expected global growth, weaker-than-expected inflation and loose monetary policy.
On Friday, the Dow and S&P 500 capped off their worst weekly performance in two years after a stronger-than-expected jobs report sent interest rates higher. The decline on Wall Street picked up steam on Monday, with the Dow plummeting 1,175 points as investors rushed for the exits in the wake of higher rates. On Tuesday, the 30-stock index swung 1,167.5 points before closing 567 points higher.
But despite Tuesday’s sharp close higher, the Dow is down 4.4 percent since Friday. The S&P 500 and Nasdaq, meanwhile, are down 4.4 percent and 3.8 percent, respectively, since then.
The positive sentiment seen on Wall Street yesterday provided a boost for international markets, with Asia-Pacific markets closing mixed to higher Wednesday, while trade in Europe was relatively positive, after posting major declines on Tuesday.
In corporate news, earnings season remained in full swing Wednesday with Hasbro and Michael Kors reporting before the bell. Hasbro posted mixed results, with sales missing expectations. The stock declined more than 4 percent in the premarket.
21st Century Fox, Tesla Motors, IAC/InterActive, Yum China and Yelp are expected to publish updates after the bell.
In economic news, Key members of the U.S. Federal Reserve are due to deliver separate remarks Wednesday. San Francisco Fed President John Williams is slated to appear in Honolulu, speaking at the Community Leaders Luncheon.
Chicago Fed President Charles Evans will be attending the Iowa Bankers Association Management conference in Des Moines, while New York Fed President William Dudley is set to make an appearance at the “Banking Culture: Still Room for Improvement” in New York.
Dallas Fed President Robert Kaplan said in Germany that rising U.S. wages may not push inflation higher. His comments countered widespread market speculation that the briskest wage growth in almost nine years in the United States would drive up inflation, paving the ground for further policy tightening by the Federal Reserve.
Investors also kept an eye on Washington after the House passed a short-term spending bill, which not only would provide support to defense spending for 2018 but also fund the government for another six weeks.
—Reuters contributed to this report.