By the end of trading, momentum had returned, and the S&P 500 rose 27.53 points, or 0.8 percent, to 3,363.00. The Dow Jones Industrial Average gained 329.04, or 1.2 percent, to 27,781.70, and the Nasdaq composite added 82.26, or 0.7 percent, to 11,167.51.
It was the last day of a strong quarter for the market, where the S&P 500 rallied 8.5 percent to follow up on its 20 percent surge in the spring. Continued support from the Federal Reserve helped drive the gains, as the central bank leaned further into the whatever-it-takes approach taken to support markets and the economy. After already cutting interest rates to nearly zero, the Fed said during the quarter that it may keep interest rates low even after inflation runs above its target level.
But momentum slowed sharply at the end of the quarter, and the S&P 500 lost 3.9 percent in September for its first monthly loss since the market was selling off in March. A long list of worries dogged Wall Street, headlined by concerns that the Big Tech stocks dominating the market simply got too expensive following their tremendous run to records.
Other worries include rising tensions between the United States and China, as well as the uncertainties swirling around the upcoming US elections.
Trading has also been notably erratic recently, with momentum veering sharply in several different directions during a single day.
On Wednesday, the S&P 500 careened between a gain of 0.1 percent and 1.7 percent for a total spread of 1.6 percentage points. That was typical for the month, marking the median for September. It’s also twice as wide as the median over the last 10 years, 0.8 percentage points.
The tumult has come as the economy’s strong rebound earlier this year following the easing-up of lockdowns has slowed. The number of layoffs has remained stubbornly high, for example, and The Walt Disney Co. said late Tuesday that it plans to lay off 28,000 workers because of government restrictions due to the pandemic that are hurting its theme parks.
Other areas of the economy have also seen growth slow since the expiration of extra unemployment benefits and other economic aid that Congress approved earlier. .
“We all knew that the small businessman or restaurant owner was getting hurt, but this takes it to a different level of just how serious it is,” said J.J. Kinahan, chief strategist with TD Ameritrade. “It maybe changes the narrative a bit.”
A report from payroll processor ADP on Wednesday gave some encouragement, though. It said hiring by private employers accelerated this month, with 749,000 jobs added versus economists’ expectations for 605,000. Other economic reports on Wednesday also came in stronger than expected, including one on business activity in the Chicago area.
That raises hopes for the federal government’s more comprehensive jobs report, which arrives on Friday. For that, economists had been expecting to see hiring slowed to 850,000 from 1.4 million in August.
This month’s jobs report will take on even more importance than usual because it will be the final one released before Election Day in November.
Tuesday night’s debate between President Donald Trump and the Democratic nominee, Joe Biden, was the first of this election season, and it amplified some of the market’s concerns. Trump said it may take months to learn the election’s results, and such a long period of uncertainty could make an already shaky market even more volatile.
But several analysts said they didn’t see the debate having a big effect on the stock market, whose path depends much more on what happens with corporate profits, interest rates and the coronavirus pandemic than who sits in the White House.
“Last night was pretty much a nothing burger from a market perspective, other than perhaps suggesting more uncertainty in the weeks ahead, which could continue to drive volatility,” said Mike Loewengart, managing director of investment strategy at E-Trade Financial.
Trump again lobbed claims of fraud at the voting process, even when the head of the FBI has said there has not been any significant coordinated national voter fraud. The tone was combative through the night, with plenty of insults and talking over one another, and reflective of the country’s deepening partisan divide.
Shares of data-mining company Palantir jumped 31 percent to $9.50 on their first day of trading. The company was born 17 ago with the help of CIA seed money. Palantir isn’t selling new shares to raise money. Instead, it’s listing existing shares for public trading.
In Europe, Germany’s DAX fell 0.5 percent. The CAC 40 in Paris fell 0.6 percent, and London’s FTSE 100 shed 0.5 percent.
In Asia, Japan’s Nikkei 225 lost 1.5 percent, Hong Kong’s Hang Seng rose 0.8 percent and stocks in Shanghai slipped 0.2 percent .
The yield on the 10-year Treasury rose to 0.68 percent from 0.66 percent late Tuesday.
AP Business Writer Elaine Kurtenbach contributed.