Stocks Edge Higher, Led by Tech and Healthcare Shares

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Tech and healthcare stocks rose Wednesday, helping the S&P 500 hover just below its record close from early May.

The benchmark index rose 0.1%, boosted by gains in Microsoft, Amazon.com and Johnson & Johnson. The tech-heavy Nasdaq Composite gained 0.3%, while the Dow Jones Industrial Average dropped 0.1%, or about 50 points.

The market has been subdued for much of the last two weeks as investors weigh the reopening of the economy against rising inflation and supply-chain concerns. Worries about the possibilities of uncontrolled inflation and higher taxes have fed into a cautious view of stocks, which are trading around all-time highs.

“The market could still be surprised by positive news,” said Olivier Sarfati, head of equities at wealth-management firm GenTrust.

The S&P 500 is on track for its 13th consecutive day of moves less than 1% in either direction, the longest such streak since a stretch from October 2019 to January 2020, according to Dow Jones Market Data. The onset of summer months is prompting people to take vacation, leading to thinner trading volumes, money managers said.

“We’ve seen very low volatility over the past week,” said John Roe, head of multiasset funds at Legal & General Investment Management. “As we get into the warmer weather, we have less market participants and a less volatile environment. This reduces liquidity.”

The so-called meme stocks that have gained popularity on online forums mostly traded lower Wednesday. Clover Health Investments shares dropped 14% after surging 86% on Tuesday. AMC Entertainment Holdings fell 12%.

Worries about runaway inflation have abated in recent days, although investors remain on watch for fresh data on inflation in May that is due Thursday.

“The debate around how persistent inflation is and will be for the coming months is key. This might create some volatility,” said Luc Filip, head of private banking investments at SYZ Private Banking. Last month’s “higher than expected [consumer-price index] figures triggered quite a bit of market stress,” he added.

Fresh data Wednesday showed a higher-than-expected spike in China’s producer prices in May, driven by a rise in commodity prices. The consumer-price index came in below forecasts, signaling that the higher costs haven’t yet been passed onto consumers.

“When you look at the global inflation picture, it is very interesting to see that actually, inflation isn’t such a problem currently in Asia,” Mr. Filip said.

In bond markets, the yield on the benchmark 10-year U.S. Treasury note dipped below 1.5% for the first time in a month. The yield was recently 1.489%, down from 1.527% on Tuesday.

“This is about positioning,” said James Athey, investment manager at Abrdn Standard Investments. “There is a big risk event coming up with CPI, people aren’t incentivized to add a lot of risk into the event.”

A trading post on the floor of the New York Stock Exchange last year.

Photo: brendan mcdermid/Reuters

Overseas, the pan-continental Stoxx Europe 600 rose 0.1% to close at a new record. The Shanghai Composite Index ticked up 0.3% by the close of trading, while Hong Kong’s Hang Seng Index edged down 0.1%.

Write to Anna Hirtenstein at anna.hirtenstein@wsj.com and Karen Langley at karen.langley@wsj.com

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