After moving modestly lower in early trading on Wednesday, stocks have shown a notable turnaround over the course of the session. The rebound on the day extends the recent upward trend by the markets, with the Dow and the S&P 500 reaching new record highs.
The major averages are currently posting modest gains, near their highs for the session. The Dow is up 44.96 points or 0.3 percent at 15,260.21, the Nasdaq is up 7.76 points or 0.2 percent at 3,470.37 and the S&P 500 is up 6.30 points or 0.4 percent at 1,656.64.
The rebound by stocks was partly due to the release of a better than expected report on homebuilder confidence in the month of May.
The National Association of Home Builders said its housing market index climbed to 44 in May from a downwardly revised 41 in April. Economists had expected the index to rise to 43.
"Builders are noting an increased sense of urgency among potential buyers as a result of thinning inventories of homes for sale, continuing affordable mortgage rates and strengthening local economies," said NAHB Chairman Rick Judson.
He added, "This is definitely an encouraging sign even amidst rising challenges with regard to the cost and availability of building materials, lots and labor."
The better than expected housing data offset negative sentiment generated by a separate report from the Federal Reserve showing a bigger than expected drop in industrial production in April.
The report said production fell by 0.5 percent in April following a 0.3 percent increase in March, while economists had expected a more modest 0.2 percent drop.
Jennifer Lee, senior economist at BMO Capital, said, "At the intersection of the U.S. economy, the housing market is still flashing a green light, while business production is flashing yellow."
A separate report from the New York Federal Reserve showed an unexpected contraction in regional manufacturing activity in May, while the Labor Department reported a drop in producer prices in April that matched estimates.
Among individual stocks, Macy's (M) has shown a notable upward move after the department store operator reported better than expected first quarter earnings and raised its dividend.
Scientific instruments maker Agilent (A) is also gaining ground after reporting first quarter earnings that fell year-over-year but came in above analyst estimates.
On the other hand, shares of Deere (DE) have come under pressure after the farm machinery maker reported better than expected quarterly results but provided disappointing guidance.
Sector News
Airline stocks have helped to lead the markets back to the upside on the day, with the NYSE Airline Index surging up by 2.6 percent. With the gain, the index has risen to its best intraday level in six years.
The rally by airline stocks is partly due to upbeat comments from Morgan Stanley, which said it continues to expect the stocks to grind higher in the short-term.
Considerable strength has also emerged among trucking stocks, as reflected by the 1.3 percent gain being posted by the Dow Jones Trucking Index. YRC Worldwide (YRCW) has helped to lead the sector higher, jumping by 18 percent.
Banking stocks have also moved notably higher on the day, resulting in a 1.1 percent gain by the KBW Bank Index. The gain has lifted the index to a four-year high.
Meanwhile, gold stocks have come under significant selling pressure, moving lower along with the price of the precious metal. With gold for June delivery tumbling $29.20 to $1,395.30 an ounce, the NYSE Arca Gold Bugs Index is down by 2.9 percent.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index surged up by 2.3 percent to a five-year high, while Hong Kong's Hang Seng Index advanced by 0.5 percent.
The major European markets have also moved to the upside on the day. While the U.K.'s FTSE 100 Index edged up by 0.1 percent, the German DAX Index and the French CAC 40 Index rose by 0.3 percent and 0.4 percent, respectively.
In the bond market, treasuries have pulled back near the unchanged line after seeing early strength. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by less than a basis point at 1.954 percent after hitting a low of 1.921.
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Market Analysis
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.