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US equities ticked higher on Wednesday, a day after their steepest drop so far this year, although investors remained cautious in placing their bets ahead of Thursday’s expected vote on healthcare legislation in Congress.
The S&P 500 rose 0.2 per cent to 2,348.4, the Dow Jones Industrial Average was flat at 20,661.2 and the Nasdaq Composite rose 0.4 per cent to 5,819.3.
US stocks took the worst spill of the year on Tuesday as concerns grew over whether the Trump administration will be able to pass policies that are seen as beneficial to corporate America.
While stocks managed to eke out a gain on Wednesday, investors remained focused on Capitol Hill, where members of the House of Representatives continued to debate legislation to repeal and replace Obamacare.
The legislation is an important test for the Trump administration, which campaigned on a slate of plans, including tax cuts and looser financial regulations. However, the White House now seems to be facing a tougher time in Congress than many had expected.
“Should the [healthcare] bill be rejected, the current high valuations in equity markets, particularly on US cyclicals and financials, may be at risk,” said Hans Redeker, a strategist at Morgan Stanley.
Treasury yields, which move in the opposite direction of prices, declined. The 10-year yield was lower by 3.3 basis points to 2.401 per cent.
Crude prices cut earlier losses, with US oil recently slipping by 10 cents to $48.14 a barrel.