By Stephen Culp
NEW YORK (Reuters) -U.S. stocks ended higher in opposition to their global counterparts on Wednesday, and crude extended its decline on projected softening demand.
Megacap growth stocks faltered, limiting the tech-heavy Nasdaq's advance.
Economically sensitive sectors helped propel the S&P 500 and the Dow to more substantial gains, with the latter eking out its third record closing high over the last four days.
"We're making up for the losses yesterday, yet investors are still cautious ahead of a slew of earnings, along with retail sales on Thursday morning," said Ryan Detrick, chief market strategist at Carson Group in Omaha.
Large banking firms have reported a string of upbeat earnings. Most recently, Morgan Stanley reported consensus-beating quarterly profit, sending its shares to a record high.
Upbeat earnings from United Airlines boosted commercial air carrier stocks by 6.5%.
But on Tuesday, chip equipment maker ASML (AS:ASML) forecast weaker than expected 2025 sales, prompting demand concerns.
"It’s early this earnings season but financials have done extremely well, of course we have many other industries coming up soon, but it is a nice start to this earning season," Detrick added. "After ASML’s disappointing guidance yesterday, worries are jumping regarding AI (artificial intelligence) and tech in general.
"The bar is set quite high and they have an important job to do, to show that the overall growth they continue to see is justified," Detrick said.
The Dow Jones Industrial Average rose 337.28 points, or 0.79%, to 43,077.70, the S&P 500 rose 27.21 points, or 0.47%, to 5,842.47 and the Nasdaq Composite rose 51.49 points, or 0.28%, to 18,367.08.
European stocks settled lower in the wake of disappointing results from ASML. Luxury goods maker LVMH weighed on sentiment as investors remained cautious ahead of the European Central Bank's (ECB) policy decision on Thursday.
MSCI's gauge of stocks across the globe rose 0.73 points, or 0.09%, to 851.98. The STOXX 600 index fell 0.19%, while Europe's broad FTSEurofirst 300 index fell 4.37 points, or 0.21%.
Emerging market stocks fell 6.09 points, or 0.53%, to 1,143.64.
Benchmark U.S. Treasury yields eased as financial markets cemented bets for a smaller interest rate cut from the Federal Reserve at the conclusion of next month's policy meeting.
The yield on benchmark U.S. 10-year notes fell 2.2 basis points to 4.014%, from 4.038% late on Tuesday. The 30-year bond yield fell 3 basis points to 4.2983% from 4.328% late on Tuesday.
The 2-year note yield, which typically moves in step with interest rate expectations, fell 2.1 basis points to 3.936%, from 3.956% late on Tuesday.
The dollar touched a 10-week high as investors ruled out a hefty policy rate cut at the Fed's next meeting, and began to consider the possibility that Republican Donald Trump could win the Nov. 5 presidential election.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.28% to 103.55, with the euro down 0.29% at $1.0858.
Against the Japanese yen, the dollar strengthened 0.34% to 149.69.
Oil prices were slightly lower, having dropped about 7% over the prior three days. Worries have eased about the Middle East conflict disrupting supply, while 2025 demand forecasts have disappointed oil traders
U.S. crude fell 0.27% to $70.39 a barrel and Brent fell to $74.22 per barrel, down 0.04% on the day.
Gold prices extended recent gains, boosted by a pull-back in U.S. bond yields.
Spot gold rose 0.49% to $2,674.10 an ounce.