The S&P 500 climbed Wednesday, attempting to claw back some losses from a day earlier, though ongoing concerns about the recovery and a potential government shutdown stifled upside momentum.
The S&P 500 rose 0.7%, the Dow Jones Industrial Average gained 0.77%, or 263 points, the Nasdaq was down 0.40%.
Consumer staples and utilities, which serve as the defensive corners of the markets, were the biggest sector gainers, as investors appeared to remain cautious amid fears about slowing growth, faster inflation, and a potential U.S. government shutdown.
"[W]hen the Fed begins to lift its foot off the gas, the fear is that the recovery will lose momentum and growth will slow," Stifel said in a note.
Conagra Brands (NYSE:CAG), Tyson Foods (NYSE:TSN), Sempra Energy (NYSE:SRE), and Nextera Energy (NYSE:NEE) led the broader market to the upside.
Treasury yields, meanwhile, resumed their climb, with he 10-year Treasury trading above 1.5%. But some on Wall Street suggested the move higher in rates still has a way to go before troubling equities.
"Without any change to the P/E, the 10-year UST yield would need to rise above 2.3% for relative equity valuations to rank above the long-term average," Goldman Sachs (NYSE:GS) said in a note.
Tech, found some respite after a rout a day earlier, but gains were kept in check by a fall in semiconductors following weakness in Micron.
Micron Technology (NASDAQ:MU) fell 2% after the chipmaker's fiscal first-quarter guidance fell short expectations and offset fourth quarter results that beat on both the top and bottom lines.
Still, investors are likely to use the weakness to seek more exposure to Micron.
"[W]hile it is unlikely that last night will be viewed as an inflection, we see investors increasingly more interested in accumulating shares as risk/reward in CY22 appears among the best in the sector especially as MU continues to demonstrate structurally improving fundamentals," Credit Suisse (SIX:CSGN) said in a note.
Energy stocks were flat as oil prices stumbled on data showing that weekly U.S. crude supplies unexpectedly rose.
The U.S. Energy Information Administration said crude stockpiles rose by 4.58 million barrels in the week to Sept. 24 versus forecasts for a drop of 2.2 million.
On the political front, lawmakers on Capitol Hill are locked in a stalemate on whether to raise the debt ceiling to fund the government, and avoid a shutdown on Friday.
The Senate is expected to vote on Wednesday or Thursday on a proposal to fund the government through early December, Senate Democratic Leader Chuck Schumer said.
In other news, Netflix (NASDAQ:NFLX) was up more than 3% after acquiring its first video game studio as the streaming giant looks to make a foray into mobile gaming.