US stocks extend gains on streak of strong corporate earnings from tech giants

• US stocks surged on Wednesday, continuing to rebound from their January sell-off as tech earnings impressed investors.
• Shares of Alphabet and Advanced Micro Devices jumped about 10% after better-than-expected reports.
• Private employment data from ADP showed a loss of 301,000 jobs in January due to Omicron.
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US stocks continued to rebound from last month's sell-off, with the S&P 500 now 7% higher from its intra-day low reached on Friday.

The fast and furious rally has been driven by a streak of strong corporate earnings. Starting with Apple and Microsoft last week, the better-than-expected earnings reports came from Alphabet and AMD this week. Both tech giants jumped about 10% in Wednesday trades.

Alphabet also announced a 20-for-1 stock split that surprised investors, while AMD pointed to continued strong demand in its data center business. Here's how three Wall Street analysts reacted to Alphabet's earnings report.

But there could be more volatility ahead amid signs of a weak job market in January and as the S&P 500 approaches its key 50-day moving average, which could serve as an area of resistance. US private jobs data from ADP showed a loss of 301,000 jobs in January due to the spread of Omicron. Economists had expected a gain of 180,000 jobs.

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

• S&P 500: 4,589.35, up 0.94%
• Dow Jones Industrial Average: 35,629.26, up 0.63% (224.02 points)
• Nasdaq Composite: 14,417.55, up 0.50%

In contrast to Alphabet and AMD, not all tech results were positive. PayPal plunged 27% after it lowered its growth outlook and recalibrated the metrics it will use going forward to measure its growth. That was a surprise to both investors and analysts. PayPal's Wednesday slump was its worst daily decline ever since it went public in 2015.

Starbucks was another company that disappointed investors with its earnings results, with the stock down about 1% in Wednesday trades after management said rising costs hit profits.

Of the 38% of S&P 500 companies that have reported earnings so far, 79% are beating profit estimates by a median of 7%, while 75% are beating revenue estimates by a median of 4%, according to data from Fundstrat.

Hedge funder Ray Dalio thinks the volatility in the stock market will continue because investors are underestimating inflation and what the Federal Reserve will do in terms of raising interest rates and reducing its balance sheet.

On the cryptocurrency front, Jack Dorsey told MicroStrategy's Michael Saylor that Facebook should have focused on bitcoin instead of wasting time on diem.

Bank of America thinks the gains in AMD can continue even after Wednesday's surge. The bank said the stock has 63% upside potential as it continues to take market share in the multibillion-dollar semiconductor market.

West Texas Intermediate crude oil rose as much as 0.52% to $88.66 per barrel. Brent crude, oil's international benchmark, jumped as much as 0.48% to $89.59 per barrel.

Gold rose as much as 0.29% to $1,806.80 per ounce. The yield on the 10-year Treasury fell one basis point to 1.78%.