Stocks rebound after prior day’s losses

Treasury yields fall after spike over interest rate expectations

NEW YORK — U.S. stocks rose on Wednesday to recover much of their losses from a day before, triggered by worries that high interest rates might stick around for months longer than hoped.

The S&P 500 climbed 47.45 points, or 1 percent, to 5,000.62 and clawed back more than two-thirds of its loss from Tuesday. A hotter-than-expected report on inflation forced investors to delay forecasts for when the Federal Reserve might start cutting interest rates, potentially into the summer. Expectations for such cuts are a big reason stocks rallied to records recently.

The Dow Jones Industrial Average gained 151.52 points, or 0.4 percent, to 38,424.27 a day after after dropping 524 points for its worst loss in nearly 11 months. The Nasdaq composite jumped 203.55, or 1.3 percent, to 15,859.15.

The smallest stocks, which took the hardest hit from worries about higher interest rates on Tuesday, bounced back more than the rest of the market. The Russell 2000 index leaped 2.4 percent.

Helping to keep things steadier on Wall Street was a calmer bond market. Treasury yields eased after shooting upward a day earlier on expectations the Fed would keep rates high for longer. The central bank has jacked its main interest rate to the highest level since 2001 in hopes of slowing the economy just enough to grind high inflation down to its target.

The yield on the 10-year Treasury fell to 4.25 percent from 4.32 percent late Tuesday. It’s still well above its 3.85 percent level at the start of this month.

Critics have been arguing that stock prices may have run too far, too fast in their rally since October. A pullback could be healthy if it take some of the “froth” out of the market, according to JJ Kinahan, CEO of IG North America.

Kinahan said he found it interesting that big recent winners like Nvidia and other chipmakers finished Tuesday well off their lows for the day. That makes him think the day’s drop “was more about taking some profits than it was panic selling” by investors.

Nvidia rose 2.5 percent Wednesday and was the single strongest force pushing up the S&P 500 index.

Davita jumped 8.6 percent for one of the S&P 500’s larger gains after the health care company reported stronger profit and revenue for the latest quarter than analysts expected.