Wall Street Just Had Its Best Day Since June

Wall Street rallied to its best day since June on Wednesday after pressure that's built up on stocks from the bond market relaxed a bit. The S&P 500 climbed 1.1% to trim its loss for what's been a dismal August so far. The Dow Jones Industrial Average rose 184 points, or 0.5%, and the Nasdaq composite jumped 1.6%. Big Tech stocks and others that benefit from easier interest rates led the way, the AP reports. They got some relief as the 10-year Treasury yield eased back further from its highest level since 2007 after a report suggested the US economy may be cooling.

A 2.2% gain for Apple's stock and 1.4% climb for Microsoft shares were two of the strongest forces pushing the S&P 500 upward. Nvidia, another one of the market's most influential stocks, rallied 3.2% ahead of its highly anticipated profit report. Nvidia and a just a handful of other companies were behind the majority of the S&P 500's gains earlier this year. They've been under more pressure recently, as yields crank higher in the bond market. When bonds are paying more in interest, investors feel less need to pay high prices for stocks and other investments that can swing sharply in price. Treasury yields eased Wednesday, taking off some of that pressure.

A preliminary reading of US services and manufacturing businesses eased to a six-month low, sending yields down across the bond market. The measure of output from S&P Global Market Intelligence still indicated growth, but less as inflation and higher interest rates bite into activity. For now, softer-than-expected data on the economy may be good for financial markets. That's because a string of surprisingly strong reports recently has raised expectations for the Federal Reserve to keep interest rates higher for longer.

story continues below

On Wall Street, Toll Brothers rose 3.9% after the homebuilder reported stronger profit for the latest quarter than expected. It had earlier been struggling with the entire housing industry as high mortgage rates ground down activity. Foot Locker tumbled 28.3% after reporting weaker profit for the latest quarter than expected. The company also paused its dividend and cut its financial forecasts for the full year, describing a "still-tough consumer backdrop."

(More stock market stories.)