On Wednesday, the Dow Jones Industrial Average gained 286 points as markets rallied for the second day in a row.
The blue-chip index gained 0.83 percent, the S&P 500 gained 0.82 percent, and the Nasdaq Composite gained 0.92 percent.
Chevron stock helped to lead the Dow, rising 3.41 percent as oil prices recovered after falling below $70 a barrel on Monday, and Boeing also performed well, rising 2.48 percent.
Earnings reports continued to roll in on Wednesday as Chipotle stock gained 11.54% and Coca-Cola stock increased 1.29% after both companies reported quarterly revenue that surpassed pre-pandemic levels.
On the contrary, Netflix stock dipped 3.28% after reporting it expects 3.5 million net subscribers in the third quarter, nearly 2 million below what analysts estimated.
“If the theme from earnings season continues to be an upbeat outlook for the economy and strong consumer that is handling the current price increases, treasuries could plunge even further, and the 10-year yield could be back above 1.4% by the time earnings season wraps,” Onada senior market analyst Edward Moya said, according to Investor’s Business Daily. “The reflation trade is back and this time it might stick around.”
The 10-year treasury yield rose 8 basis points to 1.293 percent on Wednesday after falling to a 5-month low on Monday, but bonds remained lower than the 1.7 percent seen earlier this year.
“The catalyst for why investors have become more comfortable with risk assets in the last two days is admittedly elusive,” Goldman Sachs’ Chris Hussey told CNBC on Wednesday. “Perhaps investors have only recently come to accept the idea that the reaction function to a new wave of the virus is unlikely to be the same as the reaction function used in the spring of 2020.”