U.S. stocks rose Wednesday, extending the previous session’s rebound, as investors turned their focus to the banner start to corporate earnings season.
The S&P 500 climbed 0.7%, a day after the broad market gauge posted its biggest one-day gain since late March. The two-day advance is on course to unwind Monday’s steep drop and push the index back within about 1% of its record close. The Dow Jones Industrial Average rose 253 points, or 0.7%, and the Nasdaq Composite added 0.7%.
Earnings season has helped buoy sentiment. Through Tuesday, 85% of S&P 500 companies that had filed quarterly results topped analysts’ expectations, according to FactSet.
The market recently has been lurching from one fear to the next, said Yung-Yu Ma, chief investment strategist at BMO Wealth Management. Earnings season has given traders something positive on which to focus, he said. “It’s nice to see some stabilization.”
The renewed risk appetite gave a boost to small-cap stocks, which had fallen farther than their large-cap brethren lately. The Russell 2000 was up 1.3% on Wednesday, though it remains down about 2.8% this month.
Read More: U.S. Stocks Rise as Dow Extends Rebound