Wall Street Surges as BOJ's Dovish Stance Calms Market Volatility

Wall Street's main indexes advanced on Wednesday following a dovish stance by Japan's central bank after a surprising interest rate hike last week, which had triggered global market turbulence. Key indexes recorded gains, with technology and energy sectors leading the way while the CBOE Volatility Index declined.

Wall Street's main indexes saw an uptick on Wednesday, driven by Japan's central bank's dovish turn after an interest rate hike last week, which had caused significant volatility in global markets.

Global equity markets rose as Bank of Japan (BOJ) Deputy Governor Shinichi Uchida assured that the central bank would refrain from raising interest rates amidst unstable financial markets, pushing the yen lower and bolstering market sentiment. The BOJ's unexpected rate hike on July 31, reaching a level unseen in 15 years, had spurred a surge in the low-yielding yen, leading investors to unwind their high-yield asset positions and sparking a global stocks sell-off.

The CBOE Volatility Index, dubbed Wall Street's fear gauge, fell to 22.84 points from a peak of 65.73 on Monday. At 09:35 a.m. ET, the Dow Jones Industrial Average edged up 285.67 points, or 0.73%, to 39,279.77. The S&P 500 rose 64.26 points, or 1.23%, to 5,304.29, and the Nasdaq Composite climbed 282.80 points, or 1.73%, to 16,649.66.

Prominent tech firms like Nvidia and Amazon.com rebounded, gaining around 3% and 2.3%, respectively. Ten of the 11 major S&P sectors were up, with information technology and energy leading gains. The S&P 500 and Nasdaq closed Tuesday over 1% higher after favorable comments from Federal Reserve officials mitigated recession concerns, shifting focus back to earnings.

However, Airbnb dropped 14.1% after predicting third-quarter revenue below expectations while Super Micro Computer fell 13.6% due to lower-than-expected quarterly gross margins. Meanwhile, Amgen's second-quarter profit dipped 1% amid rising expenses despite a 20% revenue increase. Additionally, Charles River Laboratories dropped 12% after lowering its annual forecast.

The market now eagerly awaits further insights on monetary policy from the U.S. central bank officials, leading up to Fed Chair Jerome Powell's speech at the upcoming Jackson Hole event. Advancing issues outpaced decliners by a 5.51-to-1 ratio on the NYSE and by a 3.74-to-1 ratio on the Nasdaq.

The S&P 500 recorded five new 52-week highs and one new low, while the Nasdaq Composite marked 19 new highs and 26 new lows.

(With inputs from agencies.)