Nasdaq Jumps 1.05 Percent as Tech Leads Wall Street Higher

The Nasdaq Composite led Wall Street higher on Wednesday, October 21, rising 278.04 points, or 1.05 percent, to close at 26,702.86. The S&P 500 added 44.60 points, or 0.58 percent, to 7,757.17, and the Dow Jones Industrial Average rose 360.21 points, or 0.69 percent, to 52,856.09. Smaller stocks joined the rise, with the Russell 2000 up 0.27 percent to 2,781.03.

SpaceX and chip stocks set the pace

Technology was the strongest of the S&P 500 sectors, rising 1.67 percent on the day, according to market data reported by Reuters. SpaceX shares jumped 7.79 percent to $159.31 after the company posted its third quarter results, its first profit since listing, and investors weighed its plan to review a possible merger with Tesla through committees of independent directors at both companies. Super Micro Computer rose 9.55 percent after the server maker forecast quarterly revenue and margins above market estimates. The strength followed a strong day for chip stocks in Asia, where South Korea's Kospi surged 4.5 percent in Seoul on heavy buying of memory chip makers.

Where the day lost ground

Communication services was the weakest sector, falling 1.11 percent, as AT&T and Netflix shares dropped after their reports. AT&T had beaten forecasts before the opening bell on Wednesday, with record fiber customer additions in its third quarter, but its shares still fell 6.45 percent by the close. Netflix fell 5.31 percent. The split showed investors rewarding companies tied to AI spending while punishing media and telecom names, even on solid numbers.

Rates, and the wait for the big reports

The yield on the 10 year Treasury note rose about 3 basis points to about 5.15 percent, a level that has kept pressure on housing and borrowing costs. Much of the session was a wait for the two biggest earnings reports of the week, from Meta Platforms and Tesla, both due after the closing bell on Wednesday, October 21.

Both companies reported after the close. Meta said third quarter revenue rose 26 percent from a year earlier to $64.60 billion, ahead of forecasts, while a legal charge of about $9.9 billion cut its reported earnings per share to $3.83. Tesla reported flat revenue for the quarter and a fall in profit. Their shares will get their first full verdict from the market when trading opens on Thursday, October 22.

Wednesday's gains extended a recovery that started on Monday, October 19, and carried through Tuesday, October 20, when the Dow jumped 529.85 points to its best close in more than a month.