Stocks rise as Wall Street fights back from the sell-off

US stocks rallied on Wednesday’s open as strong gains from Nike and FedEx provided a boost to investors looking to bounce back from a recent selloff.

The S&P 500 (^GSPC) gained 0.7%, while futures on the Dow Jones Industrial Average (^DJI) rose 300 points, or 0.9%. The tech-heavy Nasdaq Composite (^IXIC) gained 0.4%.

Nike (NKE) shares rose 13% to open after the retailer handily beat second-quarter profit and revenue expectations and reported a decline in inventories from the prior period. While the stack was still higher year over year, Nike CEO John Donahoe said he believed the company had passed its inventory peak.

Shares of FedEx Corporation (FDX) rose nearly 6% after the company revealed its aggressive cost-cutting efforts. CEO Raj Subramaniam said FedEx has identified an additional $1 billion in savings above the forecast it issued in September as part of its “ongoing transformation while navigating a weaker demand environment.” FedEx triggered a deep sell-off in September when it issued a warning about the outlook for the US economy.

Meanwhile, Rite Aid’s (RAD) stock fell 7.7% after the drugstore chain reported losses in its fiscal third quarter, weighed down by a slump in COVID vaccinations and testing.

Tesla (TSLA) remained in the spotlight after falling another 8% on Tuesday to a new two-year low – a drop that came after a 16% drop last week. Chief Executive Elon Musk confirmed on Twitter late Tuesday that he would step down as head of Twitter once he finds a replacement. Shares rose slightly during Wednesday’s open.

Separately, Tesla is expected to freeze hiring and deliver another round of layoffs next quarter, according to a report from Electrek, which cited a source familiar with the matter.

Oil prices rose for a third straight day as traders weighed a report showing a larger-than-expected decline in US inventories set against demand concerns and an expected domestic snowstorm. West Texas Intermediate (WTI) crude oil futures rose 2% to nearly $78 a barrel.

The economic calendar will deliver the Conference Board’s latest consumer confidence survey at 10 a.m. ET.

Screens on the trading floor of the New York Stock Exchange (NYSE) show Federal Reserve Chairman Jerome Powell at a press conference after the Federal Reserve announced that interest rates will rise by half a percentage point, in New York City, USA, December 14, 2022. REUTERS/Andrew Kelly

Screens on the floor of the New York Stock Exchange (NYSE) show Federal Reserve Chairman Jerome Powell at a news conference on Dec. 14, 2022. REUTERS/Andrew Kelly

Wednesday’s moves come after a volatile session Tuesday that followed an aggressive move by the Bank of Japan — seen as the last of the central banks with easy money policies — to raise the cap on its 10-year government bond yields after the U.S. Federal Reserve Reserve, European Central Bank and others raised interest rates last week.

Investors were hoping for a Santa Claus rally — a steady rise in the stock market that usually occurs in late December, usually defined as the last five trading days of the year and the first two of the new year. But concerns about ‘longer’ interest rates and a looming recession have dampened seasonal optimism.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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