US stocks traded higher in early deals on Wednesday, led by a rebound in software stocks that pushed the Nasdaq Composite to the top of Wall Street's major indexes.
As of 9:37 a.m. EDT, the Nasdaq Composite was up 193.82 points, or 0.74%, to 26,300.83, outperforming its peers as buying interest returned to technology and software names.
The S&P 500 gained 36.84 points, or 0.49%, to 7,580.43, while the Dow Jones Industrial Average rose 279.84 points, or 0.53%, to 52,788.11, according to real-time market data.
The positive start comes as investors rotated back into growth-oriented technology stocks, with software companies leading the gains after recent weakness. The broader market also remained in positive territory, reflecting steady risk appetite at the opening bell.
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The S&P 500 was trading just below its 52-week high of 7,620.90, while the Nasdaq Composite remained below its one-year peak of 27,190.21. The Dow Jones Industrial Average was also approaching its 52-week high of 53,289.30.
The rally was driven by gains across Big Tech. Tesla advanced about 2%, while Amazon, Apple, Microsoft and Alphabet gained more than 1% each. SpaceX also added nearly 2%, extending the broader strength in technology stocks.
Investor sentiment improved after New York Federal Reserve President John Williams said there were "encouraging reasons to expect that inflation has peaked and should edge down in coming quarters."
The optimism was reinforced by fresh economic data. The US Producer Price Index (PPI) unexpectedly fell 0.3% in June, against economists' expectations for no monthly change. The data followed Tuesday's softer-than-expected Consumer Price Index (CPI) report, strengthening expectations that the Fed may not need to tighten monetary policy as aggressively this year.
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According to CME's FedWatch Tool, traders sharply lowered expectations of a July rate hike, with the probability dropping to 17% from 42% a day earlier. Markets, however, continue to price in another rate increase later this year, assigning a 63% probability of rates being a quarter- or half-percentage point higher after the Fed's September meeting.
The market's gains, however, were capped by a rebound in crude oil prices. West Texas Intermediate (WTI) crude futures rose about 1% to trade above $80 per barrel, while Brent crude gained 0.6% to move above $85 per barrel, after the US Central Command said fresh strikes had been carried out against Iran.
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