Wall Street surged on Wednesday as investors shrugged off  stronger-than-expected inflation data and snapped up shares of Facebook (FB.O), Amazon.com (AMZN.O) and Apple (AAPL.O).

The fourth straight day of gains in the S&P 500 saw a return to the "fear of missing out" mentality that accompanied Wall Street's rally in recent months ahead of a slump last week into correction territory.

Facebook jumped 3.7 percent while Amazon.com and Apple both rose more than 1.8 percent. All three fueled the S&P 500 more than any other shares, leaving the index up 1.34 percent for the session. They, along with Netflix (NFLX.O) and Alphabet (GOOGL.O) - collectively called the FAANG stocks - were major contributors to last year's market rally, and all but Alphabet have weathered the recent selloff better than the broader market.

"FAANG is still working. And people feel that because they held up during the downturn, you can come back to them and not get hammered if things turn down again," said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta, Georgia.

"There is still a fear of missing out."

Since Thursday, the S&P 500 has surged 4.56 per cent, its strongest four-session performance since mid-2016. The index remains down about 6 per cent from its record high on Jan. 26.

The Labor Department's core Consumer Price Index, which excludes the volatile food and energy components, increased 0.3 per cent in January, while economists polled by Reuters had forecast an increase of 0.2 per cent. However, the year-on-year rise was unchanged at 1.8 per cent.

The data raised the specter of rising inflation and rekindled fears that the Federal Reserve could be forced to be more aggressive with interest rate increases.

But those inflation concerns were tempered by data showing U.S. retail sales fell 0.3 per cent last month, the biggest decline in nearly a year and in sharp contrast to economists' estimates for a 0.2 per cent increase.

"The CPI shows there is some inflation, but it was not through the roof," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville. "People got too pessimistic."

Underpinning confidence among many investors is the belief that the U.S. economy remains strong and that tax cuts enacted this year will spur corporate earnings and lead consumers to spend more.

The Dow Jones Industrial Average jumped 1.03 per cent to end at 24,893.49 while the S&P 500 rose 1.34 per cent to finish at 2,698.63.

The Nasdaq Composite surged 1.86 per cent to 7,143.62.

 

CANADIAN MARKETS

McCreath: 'No rush to pile back into the markets'

BNN Commentator Andrew McCreath discusses the recent market correction and what we can expect from historical recovery rates.

Canada's main stock index rose on Wednesday after investor sentiment rebounded following the bullish U.S. inflation report and energy stocks rallied on strong oil prices.

The Toronto Stock Exchange's S&P/TSX composite index unofficially closed up 111.8 points, or 0.73 per cent, to 15,328.27. Seven of the index's 10 main groups were in positive territory.

The materials group, which includes precious and base metals miners, added 2.8 per cent. The prices of gold, silver and copper posted strong gains. Barrick Gold Corp (ABX.TO) advanced 3 per cent to $17.14, and Goldcorp Inc (G.TO) jumped 5 per cent to $16.78.

The financials sector was up 0.6 per cent. Canadian Imperial Bank of Commerce (CM.TO) added 0.7 per cent to $115.51, and Bank of Nova Scotia (BNS.TO) rose 1.1 per cent to $77.73.

The energy group climbed 1.9 per cent. Canadian Natural Resources Ltd (CNQ.TO) jumped 2.7 per cent to $39.66, and Suncor Energy (SU.TO) added 0.8 per cent to $42.52.