US stocks close higher with Nasdaq up 2% as investors await key consumer inflation data

• Tech stocks led Wednesday's advance on Wall Street, pushing Nasdaq Composite up over 2%.
• Investors are preparing for Thursday's inflation report for January and the annual rate could edge up to 7.3%.

US stocks closed higher Wednesday, with tech stocks leading gains before investors receive highly anticipated data on January inflation.

Tech shares led advances, with the Nasdaq Composite up for a second straight session. The group found some relief as a selloff in the bond market eased and pulled the 10-year Treasury yield away from the closely watched 2% level.

Rising rates can suggest a cut into the value of future profit for tech and other growth companies. Facebook parent Meta Platforms and Google were among the day's winners. The S&P 500 also rose a second consecutive day and the Dow industrials picked up a third straight win.

"Markets [are] continuing to firm after early-year weakness. Think there's a sense that the market expectations for Fed (and global central bank) hawkishness are now a bit overdone. Both Fedspeak pushback and rate stabilization helping there, though an outside-of-expectations inflation report tomorrow morning could throw a wrench in that calculus," said Ross Mayfield, investment strategy analyst at Baird, in a note to Insider.

Here's where US indexes stood at 4:00 p.m. on Wednesday:

• S&P 500: 4,587.18, up 1.45%
• Dow Jones Industrial Average: 35,768.06, up 0.86% (305.28 points)
• Nasdaq Composite: 14,490.37, up 2.08%

The Labor Department's report on the January consumer price index will be the market's big data point Thursday. The annual inflation rate is expected at 7.3%, according to an Econoday consensus estimate. That would be higher than December's 7% rate which was the steepest since June 1982.

Investment banks have called for anywhere from three to seven rate hikes by the Federal Reserve this year. Atlanta Fed President Raphael Bostic told CNBC on Wednesday he sees inflation costs coming down soon.

"I am very hopeful we are going to start to see that decline," he said. "There is some evidence we are on the cusp of that," Bostic said, adding that he expects at three rate hikes this year. A fourth is possible but the central bank would want to monitor the economy's response to the rate hikes, he said.

Around markets, high-yield bonds are flashing a warning that the stock market might break lower and retest its January bottom, BofA says.

Chipotle stock climbed after the Mexican food chain passed menu price increases to its customers, helping offset inflationary pressures and deliver a Q4 earnings beat.

Billionaire bitcoin backer Mike Novogratz said the recovery of the funds from the Bitfinex hack is a positive for the crypto world because it shows some of the merits of blockchain technology.

Oil prices were mixed. West Texas Intermediate crude shed 0.1% to $89.27 per barrel. Brent crude, the international benchmark, turned higher, up 0.5% at $91.26.

Gold also flipped up, rising 0.5% to $1,836.10 per ounce. The 10-year yield fell 5 basis points to 1.919%.

Bitcoin edged down 0.2% to $44,062.31.