The stock market today displayed a shift from volatile movements to a more pronounced upward trajectory by the end of the trading session. Notably, the Nasdaq composite surged nearly 1.7%, leading the market higher, supported by gains that positioned AI bellwether Nvidia for a potential follow-on buy point. Other major indexes also rebounded, erasing earlier losses.
The Cboe Market Volatility Index (VIX) declined nearly 5% to 15.05, marking a decrease in four out of the last five trading days. This decrease in volatility signaled increased stability in the market.
However, bond prices continued to decline, causing yields to rise and creating a temporary headwind for stocks. The 10-year Treasury bond yield edged up by 3 basis points to 4.57%, reaching its highest closing level since November.
Despite the bond market movement, most banks rebounded following the release of the Producer Prices Index (PPI) for March, which showed moderate growth of 2.1% year over year, slightly below expectations. However, Morgan Stanley faced significant selling pressure after reports emerged about investigations into its client vetting processes for its wealth management unit.
In terms of market performance, the Dow Jones Industrial Average initially experienced selling pressure but managed to recover by the afternoon, ending the session nearly flat. Meanwhile, the S&P 500 posted moderate gains, extending its year-to-date rise, and the Russell 2000 rebounded after initially easing lower.
Tech stocks, including Nvidia, led the market higher, with the Nasdaq index surging nearly 272 points. Nvidia tested its 10-week moving average and recorded gains of more than 3%, signaling a potential buy opportunity. The megacap tech company holds a strong Composite Rating of 99.
Other chip shares also contributed to the market’s upside, along with enterprise software firms, particularly boosting the Nasdaq index.
In terms of individual stock movements, Fastenal experienced sharp declines, triggering a sell signal after falling below its 50-day moving average. Conversely, Costco Wholesale saw gains, retaking its 50-day line and announcing a quarterly dividend hike. However, Regeneron Pharmaceuticals faced losses amid reports of a Department of Justice investigation, leading to concerns about potential pricing fraud related to its medicine Eylea.
Overall, while the market displayed volatility and some specific stocks faced challenges, tech stocks and certain sectors contributed to a broader market advance, signaling resilience in the face of headwinds such as rising bond yields.