Risk is back on the menu.
The Nasdaq Composite rose 0.8% in Wednesday trading as Tesla, Nvidia, and other riskier stocks helped lift the broader market. The S&P 500 was up 0.3% despite nearly half of its stocks dropping on the day. The Dow was down 38 points, or 0.1%.
A rotation away from riskier stocks and momentum and into smaller stocks was disrupted on Wednesday. Instead, today’s leading stocks included a mix of high beta stocks, small-caps, growth stocks, and recent outperformers.
The lagging factors included value, low volatility, and quality.
At the sector level, it was tech, materials, energy, and consumer discretionary all gaining more than 0.7%, while utilities and health care were down 0.6% or more.
It’s a bit of a weird week with traders off for Independence Day on Friday. U.S. markets will close early on Thursday. But before that, traders will get the June jobs report. Wall Street is looking for signs of resilience despite a weak ADP private payrolls report on Wednesday.
Of course, a very weak report could speed up the timeline for interest rate cuts. Whether that’s a good thing for stocks depends on if the Fed can preempt a deeper economic turn with such cuts.