Investor Sentiment Improves; Dow Jumps Over 150 Points

The CNN Money Fear and Greed index showed an improvement in the overall market sentiment, while the index remained in the "Greed" zone on Wednesday.

U.S. stocks closed higher on Wednesday, after recording sharp losses in the previous session.

On Tuesday, the 30-stock Dow index fell more than 1% following the release of inflation data. The annual inflation rate in the U.S. eased to 3.1% in January from 3.4% in December but came higher than market estimates of 2.9%.

Lyft, Inc. LYFT shares jumped around 35% on Wednesday after the company reported fourth-quarter financial results and issued guidance. Airbnb, Inc. ABNB shares fell around 2% following fourth-quarter financial results.

Most sectors on the S&P 500 closed on a positive note, with industrials, information technology, and communication services stocks recording the biggest gains on Wednesday. However, consumer staples and energy stocks bucked the overall market trend, closing the session lower.

The Dow Jones closed higher by around 161 points to 38,424.27 on Wednesday. The S&P 500 rose 0.96% at 5,000.62, while the Nasdaq Composite rose 1.30% at 15,859.15 during Wednesday’s session.

Investors are awaiting earnings results from US Foods Holding Corp. USFD, Deere & Company DE, Coinbase Global, Inc. COIN and Dropbox, Inc. DBX today.

At a current reading of 73.1, the index remained in the "Greed" zone on Wednesday, versus a prior reading of 71.7.

What is CNN Business Fear & Greed Index?

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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