US stocks saw impressive gains on Wednesday, recovering from a brief pullback led by losses in major tech stocks. At 11:50 a.m. in New York, the S&P 500 Index rose by 0.6%, bouncing back from a decline the previous day. Similarly, the NASDAQ 100 Index gained 0.9%, rebounding from its losses. The Cboe Volatility Index, also known as the VIX, hovered around 18, reflecting a relatively calm market despite the recent fluctuations.

The shift in market sentiment followed a strong performance last week, driven by a record high in the markets. According to Mark Hackett from Nationwide, the market may be in a phase of consolidation rather than signaling the start of a prolonged downturn. “A pullback after a strong earnings season is typical, and we expect a strong finish to the year,” Hackett added. 

Robert Edwards from Edwards Asset Management also noted that the correction in large-cap tech stocks was overdue but suggested it would be short-lived. He emphasized that companies’ earnings growth remains robust and that the pullback presents an opportunity for investors with a long-term perspective.

Tech Earnings Highlight Market Concerns

Although major indices witnessed a recovery, there were increasing concerns about the valuations of technology, particularly from certain players who reported poor financial results. Advanced Micro Devices Inc. (AMD) saw a minor drop in its shares after the stock opened nearly 3% lower, as the chipmaker failed to meet high investor expectations despite exceeding expectations in its earnings. 

Meanwhile, Super Micro Computer’s stock tumbled after missing first-quarter sales estimates and providing a weak earnings forecast.

These declines in technology stocks raised valuation concerns and questioned the sustainability of the boom, particularly in the companies that are closely associated with the development of AI. According to Robert Edwards, although big tech companies continue to be able to grow, sectors like consumer staples, healthcare, and mid and small-cap stocks are set to become the growth drivers.

Positive Economic Data Fuels Optimism for Interest Rate Cut

Encouraging private-sector data further supported the market's upward movement on Wednesday. ADP Research reported an increase of 42,000 jobs in October, following a revised decline of 29,000 jobs in September. 

This positive labor market data further fueled speculation that the Federal Reserve may consider cutting interest rates in December. Jamie Cox, managing partner at Harris Financial Group, noted that the latest data indicate a cooling labor market, which could prompt the Fed to take action in response.

In addition to employment data, service‑sector data further improved sentiment. The Institute for Supply Management reported that its non-manufacturing purchasing managers index (PMI) rose to 52.4 in October from 50.0 in September. New orders surged to their highest level since June. 

However, employment in services remained subdued, with the survey’s employment index at 48.2, a level indicating contraction. Economists warned that the ongoing government shutdown has created a data blackout, complicating the interpretation of the PMI

Investors interpreted the report as raising the likelihood of a December interest‑rate cut, though some cautioned that more data would be needed. Bret Kenwell of eToro remarked that the “big question is whether investors will find relief in these numbers or be disappointed by what they might mean for the Federal Reserve’s December decision.”

Corporate Highlights and Stock Movements

Several companies saw significant movements in the stock market based on their quarterly earnings reports. Corporate earnings continued to drive stock‑specific moves:

• McDonald's Corp.: The fast-food giant reported stronger-than-expected US sales growth, as consumers opted for more affordable fast food options.

• Axon Enterprise Inc.: The maker of Tasers saw a sharp decline in its stock after reporting disappointing third-quarter earnings.

• Pinterest Inc.: Shares fell after the social media platform issued a weaker-than-expected sales forecast.

• Bank of America shares slipped despite raising profitability targets, dragging the broader financial sector lower.

• Johnson Controls posted the largest gain on the S&P 500 after forecasting higher profits for 2026.

Meanwhile, companies in other sectors like healthcare, pharmaceuticals, and the food industry continued to show resilience. Humana Inc. reported better-than-expected profits, maintaining its full-year guidance, while Teva Pharmaceuticals Inc. surpassed expectations with its branded drug sales.

Also Read: US Stock Market Today: Tech Stocks Take a Hit, S&P 500 and NASDAQ Plunge Amid Valuation Concerns